Environmental regulation and its impact on welfare and international competitiveness in a Heckscher-Ohlin framework
This paper discusses the issue of competitiveness and environmental regulation from the viewpoint of Heckscher-Ohlin models. It demonstrates that the impact of unilateral environmental regulations does not necessarily lead to a decrease in international competitiveness. Important is the measure of international competitiveness and the industry under consideration. Furthermore, this paper shows that in contrast to other theoretical work on this subject, unilateral environmental regulation does not necessarily lead to capital flight. It is also possible that the economy under consideration attracts more internationally mobile capital.
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- Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
- Rauscher, Michael, 1997. "International Trade, Factor Movements, and the Environment," OUP Catalogue, Oxford University Press, number 9780198290506.
- Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
- Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
- Markusen, James R., 1975. "International externalities and optimal tax structures," Journal of International Economics, Elsevier, vol. 5(1), pages 15-29, February.
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