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Effect of a Differentially Applied Environmental Regulation on Agricultural Trade Patterns and Production Location: The Case of Methyl Bromide


  • Lynch, Lori
  • Malcolm, Scott A.
  • Zilberman, David


It has been hypothesized that differentially applied environmental regulations create pollution havens, as firms will choose to invest in countries with lax environmental standards. Using a theoretical model of pest control adoption and an empirical spatial equilibrium model, we examine one such environmental regulation, a U.S. ban on methyl bromide, to determine if an agricultural pollution haven will be created in Mexico. Alterations in agricultural production location, trade patterns, and methyl bromide use are determined. We find that, under the assumptions held, Mexico will not dramatically increase its use of methyl bromide following the ban. Sensitivity analysis to this result is conducted.

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  • Lynch, Lori & Malcolm, Scott A. & Zilberman, David, 2005. "Effect of a Differentially Applied Environmental Regulation on Agricultural Trade Patterns and Production Location: The Case of Methyl Bromide," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(1), pages 1-21, April.
  • Handle: RePEc:ags:arerjl:10202
    DOI: 10.22004/ag.econ.10202

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    References listed on IDEAS

    1. Spreen, Thomas H., 2006. "Price Endogenous Mathematical Programming Models and Trade Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(2), pages 1-5, August.
    2. Judith M. Dean & Mary E. Lovely & Hua Wang, 2017. "Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China," World Scientific Book Chapters, in: Mary E Lovely (ed.), International Economic Integration and Domestic Performance, chapter 9, pages 155-167, World Scientific Publishing Co. Pte. Ltd..
    3. Deepak, M.S. & Spreen, Thomas H. & VanSickle, John J., 1996. "An Analysis Of The Impact Of A Ban Of Methyl Bromide On The U.S. Winter Fresh Vegetable Market," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 28(2), pages 1-11, December.
    4. Sullivan, John, 1994. "Environmental Policies: Implications for Agricultural Trade," Foreign Agricultural Economic Report (FAER) 148004, United States Department of Agriculture, Economic Research Service.
    5. Dean, Judith M., 1992. "Trade and the environment : a survey of the literature," Policy Research Working Paper Series 966, The World Bank.
    6. Nordström, Håkan & Vaughan, Scott, 1999. "Trade and the environment," WTO Special Studies, World Trade Organization (WTO), Economic Research and Statistics Division, volume 4, number 4.
    7. Peters, Mark A. & Spreen, Thomas H., 1989. "Price Endogenous Mathematical Programming Models And Integrability: An Alternative Approach," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270478, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. repec:ags:joaaec:v:28:y:1996:i:2:p:433-43 is not listed on IDEAS
    9. Calvin, Linda & Barrios, Veronica, 1999. "Marketing Winter Vegetables From Mexico," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(1), pages 1-13, March.
    10. Willig, Robert D, 1976. "Consumer's Surplus without Apology," American Economic Review, American Economic Association, vol. 66(4), pages 589-597, September.
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    Cited by:

    1. Lei, Lei, 2018. "Effects of trade policy on technological innovation in agricultural markets - implications for the developing economies," IDE Discussion Papers 687, Institute of Developing Economies, Japan External Trade Organization(JETRO).


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