Environmental policy uncertainty, policy coordination and relocation decisions
We analyse the relocation decision of a firm who is producing in one country (home country) but has the opportunity to relocate. The firm is faced with uncertain environmental policy formation both at home as well as in the foreign country. We allow for international environmental policy coordination and for environmental policy risks to be correlated with economy-wide risk. We show that the impact of uncertainty on the relocation decision depends on the absolute level of uncertainty. However, this relationship is substantially affected by the existence of policy coordination and the correlation between environmental policy uncertainty and economy-wide risks. In the case of coordinated environmental policies for instance, an Ushaped relation between uncertainty and relocation emerges.
|Date of creation:||Dec 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Hoveniersberg 4, B-9000 Gent|
Phone: ++ 32 (0) 9 264 34 61
Fax: ++ 32 (0) 9 264 35 92
Web page: http://www.ugent.be/eb
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ulph, Alistair & Valentini, Laura, 2001. " Is Environmental Dumping Greater When Plants Are Footloose?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 673-88, December.
- Henk Folmer & Tim Jeppesen, 2001. "The confusing relationship between environmental policy and location behaviour of firms: A methodological review of selected case studies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 35(4), pages 523-546.
- John A. List & W. Warren McHone & Daniel L. Millimet, 2003.
"Effects of air quality regulation on the destination choice of relocating plants,"
Oxford Economic Papers,
Oxford University Press, vol. 55(4), pages 657-678, October.
- Daniel Millimet & John List & Warren McHone, 2003. "Effects of air quality regulation on the destination choice of relocating plants," Natural Field Experiments 00502, The Field Experiments Website.
- Anastasios Xepapadeas, 2001.
"Environmental Policy and Firm Behavior: Abatement Investment and Location Decisions under Uncertainty and Irreversibility,"
in: Behavioral and Distributional Effects of Environmental Policy, pages 281-308
National Bureau of Economic Research, Inc.
- Anastasios Xepapadeas, 1999. "Environmental Policy and Firm Behavior: Abatement Investment and Location Decisions Under Uncertainty and Irreversibility," NBER Technical Working Papers 0243, National Bureau of Economic Research, Inc.
- James R. Markusen, 1996.
"Costly Pollution Abatement, Competitiveness, and Plant Location Decisions,"
NBER Working Papers
5490, National Bureau of Economic Research, Inc.
- Markusen, James R., 1997. "Costly pollution abatement, competitiveness and plant location decisions," Resource and Energy Economics, Elsevier, vol. 19(4), pages 299-320, November.
- Markusen, James R., 1995. "Costly pollution abatement, competitiveness, and plant location decisions," Discussion Papers, Series II 260, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
- Mincer, Jacob, 1976.
"Unemployment Effects of Minimum Wages,"
Journal of Political Economy,
University of Chicago Press, vol. 84(4), pages S87-104, August.
- Pindyck, Robert S., 1990.
"Irreversibility, uncertainty, and investment,"
3137-90., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Henk Folmer & John List & Tim Jeppesen, 2002.
"Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis,"
Natural Field Experiments
00511, The Field Experiments Website.
- Tim Jeppesen & John A. List & Henk Folmer, 2002. "Environmental Regulations and New Plant Location Decisions: Evidence from a Meta-Analysis," Journal of Regional Science, Wiley Blackwell, vol. 42(1), pages 19-49.
- Motta, Massimo & Thisse, Jacques-Francois, 1994. "Does environmental dumping lead to delocation?," European Economic Review, Elsevier, vol. 38(3-4), pages 563-576, April.
- Ulph, A. & Valentini, L., 1997. "Plant location and strategic environmental policy with inter-sectoral linkages," Resource and Energy Economics, Elsevier, vol. 19(4), pages 363-383, November.
- Petrakis, Emmanuel & Xepapadeas, Anastasios, 2003. "Location decisions of a polluting firm and the time consistency of environmental policy," Resource and Energy Economics, Elsevier, vol. 25(2), pages 197-214, May.
- Wolfgang Keller & Arik Levinson, 1999. "Environmental Compliance Costs and Foreign Direct Investment Inflows to U.S. States," NBER Working Papers 7369, National Bureau of Economic Research, Inc.
- Ulph, Alistair, 1996. "Environmental Policy and International Trade when Governments and Producers Act Strategically," Journal of Environmental Economics and Management, Elsevier, vol. 30(3), pages 265-281, May.
When requesting a correction, please mention this item's handle: RePEc:rug:rugwps:03/208. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nathalie Verhaeghe)
If references are entirely missing, you can add them using this form.