Environmental regulation, multinational companies and international competitiveness
AbstractConcerns have been expressed that in a global market place with mobile capital, national governments will have incentives to set weak environmental policies (â€œenvironmental dumpingâ€) to protect the international competitiveness of their domestic firms, that these incentives are particularly strong in industries where plants may be relatively footloose, so that governments are concerned to prevent â€œcapital flightâ€, and that footloose plants are particularly associated with multinational firms. It is then often suggested that appropriate policy responses would be to seek to harmonise environmental regulations or impose minimum standards for environmental regulations. In this paper we set out these concerns in terms of a number of more precisely made claims and then review recent developments in economic analysis (including some of our own work) and empirical evidence to show that the claims cannot be generally sustained and that the suggested policies may be harmful. However, devising more appropriate policies is by no means straightforward. Keywords; plant location, environmental policy, eco-dumping, competition JEL Classification: F1, H4, L5, Q2
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Economics Division, School of Social Sciences, University of Southampton in its series Discussion Paper Series In Economics And Econometrics with number 0037.
Date of creation: 01 Jan 2000
Date of revision:
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- H4 - Public Economics - - Publicly Provided Goods
- L5 - Industrial Organization - - Regulation and Industrial Policy
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feenstra, T.L., 1998. "Environmental Policy Instruments and International Rivalry: A Dynamic Analysis," Open Access publications from Tilburg University urn:nbn:nl:ui:12-76006, Tilburg University.
- Rauscher, Michael, 1997. "International Trade, Factor Movements, and the Environment," OUP Catalogue, Oxford University Press, number 9780198290506, September.
- James R. Markusen & Edward R. Morey & Nancy Olewiler, 1991.
"Environmental Policy When Market Structure and Plant Locations are Endo-genous,"
NBER Working Papers
3671, National Bureau of Economic Research, Inc.
- Markusen James R. & Morey Edward R. & Olewiler Nancy D., 1993. "Environmental Policy when Market Structure and Plant Locations Are Endogenous," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 69-86, January.
- Hoel, Michael, 1997. " Environmental Policy with Endogenous Plant Locations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 241-59, June.
- Ulph, A. & Valentini, L., 1997. "Plant location and strategic environmental policy with inter-sectoral linkages," Resource and Energy Economics, Elsevier, vol. 19(4), pages 363-383, November.
- James R. Markusen & Edward R. Morey & Nancy Olewiler, 1992. "Noncooperative Equilibria in Regional Environmental Policies When Plant Locations are Endogenous," NBER Working Papers 4051, National Bureau of Economic Research, Inc.
- Ulph, Alistair, 1998. "Political institutions and the design of environmental policy in a federal system with asymmetric information," European Economic Review, Elsevier, vol. 42(3-5), pages 583-592, May.
- Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
- Johal, S. & Ulph, A., 1998. "Tying governments' hands: why harmonisation of environmental policies may be desirable," Discussion Paper Series In Economics And Econometrics 9802, Economics Division, School of Social Sciences, University of Southampton.
- Levinson, Arik, 1996. "Environmental regulations and manufacturers' location choices: Evidence from the Census of Manufactures," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 5-29, October.
- Ulph, A., 1997. "Harmonisation, minimum standards and optimal international environmental policy under asymmetric information," Discussion Paper Series In Economics And Econometrics 9701, Economics Division, School of Social Sciences, University of Southampton.
- Motta, Massimo & Thisse, Jacques-Francois, 1994. "Does environmental dumping lead to delocation?," European Economic Review, Elsevier, vol. 38(3-4), pages 563-576, April.
- Virginia D. McConnell & Robert M. Schwab, 1990. "The Impact of Environmental Regulation on Industry Location Decisions: The Motor Vehicle Industry," Land Economics, University of Wisconsin Press, vol. 66(1), pages 67-81.
- Fredriksson, Per G., 1997. "The Political Economy of Pollution Taxes in a Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 33(1), pages 44-58, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Thorn).
If references are entirely missing, you can add them using this form.