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Pollution Haven Effect with Heterogeneous Firms

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  • Zhang, Hongliang

Abstract

I developed a heterogeneous firm model to examine pollution haven effect within the industry. Environmental regulation reduces the number of domestic firms in the industry by forcing the least productive firms out, and shifts the domestic firms into the foreign country. Although there are resource allocations between firms, total welfare is decreasing due to the stringency of regulation. The impact of environmental regulation on the competitiveness is dependent on the relative size of abatement cost to marginal production cost and regulation regimes.

Suggested Citation

  • Zhang, Hongliang, 2013. "Pollution Haven Effect with Heterogeneous Firms," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150781, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:150781
    DOI: 10.22004/ag.econ.150781
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    References listed on IDEAS

    as
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