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The pollution haven hypothesis : a geographic economy model in a comparative study

  • Sonia Ben Kheder

    ()

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Natalia Zugravu

    ()

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Although based on theoretical foundations, the pollution haven hypothesis stating that heterogenous environmental regulations between countries influence multinational firms' location decisions, has never been clearly proven empirically. In this study, we reexamine this hypothesis by a fresh take on both its theoretical and empirical aspects. While applying a geographic economy model on French firm-level data, we confirm the pollution haven hypothesis for a global sample. Through sensitivity analysis, we validate it for Central and Eastern European countries, emerging and high-income OECD countries, but not for the major part of the Commonwealth of Independent States countries. Finally, we show that the pollution haven hypothesis is confirmed in the strongest manner for emerging economies.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00344845.

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Date of creation: Apr 2008
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Publication status: Published in Documents de travail du Centre d'Economie de la Sorbonne 2008.83 - ISSN : 1955-611X. 2008
Handle: RePEc:hal:cesptp:halshs-00344845
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00344845
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