Environmental Regulation and Industry Location
AbstractThis 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 InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2009.2.
Date of creation: Jan 2009
Date of revision:
Pollution Haven Hypothesis; Comparative Advantage; Industry Location;
Find related papers by JEL classification:
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-28 (All new papers)
- NEP-ENV-2009-07-28 (Environmental Economics)
- NEP-REG-2009-07-28 (Regulation)
- NEP-URE-2009-07-28 (Urban & Real Estate Economics)
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- Edward Manderson & Richard Kneller, 2012.
"Environmental Regulations, Outward FDI and Heterogeneous Firms: Are Countries Used as Pollution Havens?,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 51(3), pages 317-352, March.
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- 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.
- Mulder, Peter & de Groot, Henri L.F., 2013.
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- Peter Mulder & Henri L.F. de Groot, 2012. "Dutch Sectoral Energy Intensity Developments in International Perspective, 1987-2005," Tinbergen Institute Discussion Papers 12-049/3, Tinbergen Institute.
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