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
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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
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