Recent years have witnessed a dramatic increase in the number of firms shifting stages of their production processes overseas. In this paper we investigate whether firms outsource the dirtier stages of production to minimise domestic environmental regulation costs - a process broadly consistent with the pollution haven hypothesis. We develop a theoretical model of environmental outsourcing that focuses on the roles played by firm size and productivity, transport costs and environmental regulations. We test the model's predictions using a firm-level data set for Japan. We find evidence of an 'environmental outsourcing' effect although this is mitigated by transport costs and other factors related to dirty good production.
|Date of creation:||Oct 2010|
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- Tomiura, Eiichi, 2005.
"Foreign outsourcing and firm-level characteristics: Evidence from Japanese manufacturers,"
Journal of the Japanese and International Economies,
Elsevier, vol. 19(2), pages 255-271, June.
- Eiichi Tomiura, 2004. "Foreign outsourcing and firm-level characteristics: evidence from Japanese manufacturers," Hi-Stat Discussion Paper Series d04-64, Institute of Economic Research, Hitotsubashi University.
- Eiichi Tomiura, 2008. "Foreign outsourcing and the product cycle: evidence from micro data," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 1019-1022.
- Tomiura, Eiichi, 2007. "Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level," Journal of International Economics, Elsevier, vol. 72(1), pages 113-127, May.
- Eiichi Tomiura, 2005. "Foreign Outsourcing, Exporting, and FDI: A Productivity Comparison at the Firm Level," Discussion Paper Series 168, Research Institute for Economics & Business Administration, Kobe University.