Trade liberalization, environmental regulation and self-regulation of multinational firms
Using a monopolistic competition model with mobile capital, where firms may choose between a â€œdirtyâ€ or a â€œcleanâ€ technology, this work explores the relationship between environment, trade liberalization, geographical and technical choices of multinational firms. We show that beside of environmental regulation, the ecological sensitivity of consumers can also be a market mechanism which may urge firms to self-regulate. We show in particular that a local sensitivity of environmental issues amplifies the phenomenon of Pollution Haven induced by an environmental tax, while a more comprehensive environmental awareness attenuates or cancels it gradually as the liberalization progresses.
|Date of creation:||Nov 2010|
|Date of revision:||Nov 2010|
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- Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November.
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- Petra Christmann & Glen Taylor, 2001. "Globalization and the Environment: Determinants of Firm Self-Regulation in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 439-458, September.
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- Sébastien Raspiller & Nicolas Riedinger, 2008. "Do Environmental Regulations Influence the Location Behavior of French Firms?," Land Economics, University of Wisconsin Press, vol. 84(3), pages 382-395. Full references (including those not matched with items on IDEAS)
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