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Environmental Regulation and Industry Location

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Author Info

  • Abay Mulatu

    (University of Manchester)

  • Reyer Gerlagh

    (University of Manchester)

  • Dan Rigby

    (University of Manchester)

  • Ada Wossink

    (University of Manchester)

Abstract

This paper estimates the effect of environmental regulation on industry location and compares it with other determinants of location such as agricultural, education and R&D country characteristics. The analysis is based on a general empirical trade model that captures the interaction between country and industry characteristics in determining industry location. The Johnson-Neyman technique is used to fully explicate the nature of the conditional interactions. The model is applied to data on 16 manufacturing industries from 13 European countries. The empirical results indicate that the pollution haven effect is present and that the relative strength of such an effect is of about the same magnitude as other determinants of industry location. A significant negative effect on industry location is observed only at relatively high levels of industry pollution intensity.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2009.2.

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Date of creation: Jan 2009
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Handle: RePEc:fem:femwpa:2009.2

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Related research

Keywords: Pollution Haven Hypothesis; Comparative Advantage; Industry Location;

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Cited by:
  1. Sunghoon Chung, 2012. "Environmental Regulation and the Pattern of Outward FDI: An Empirical Assessment of the Pollution Haven Hypothesis," Departmental Working Papers 1203, Southern Methodist University, Department of Economics.
  2. Richard Kneller & Edward Manderson, . "Environmental Regulations, Outward FDI and Heterogeneous Firms: Are Countries Used as Pollution Havens?," Discussion Papers 09/28, University of Nottingham, GEP.
  3. Mulder, Peter & de Groot, Henri L.F., 2013. "Dutch sectoral energy intensity developments in international perspective, 1987–2005," Energy Policy, Elsevier, vol. 52(C), pages 501-512.

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