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Environmental Regulation and Competitiveness: Evidence from Romania

  • Guglielmo Caporale

    ()

  • Christophe Rault

    ()

  • Robert Sova

    ()

  • Anamaria Sova

    ()

According to the pollution haven hypotheses differences in environmental regulation affect trade flows and plant location. Specifically, environmental stringency should decrease exports and increase imports of “dirty” goods. This paper estimates a gravity model to establish whether the implementation of more stringent regulations in Romania has indeed affected its competitiveness and decreased exports towards its European trading partners. Our findings do not provide empirical support to the pollution haven hypothesis, i.e. environmental stringency is not found to affect significantly total trade, or its components (pollution intensive trade and pollution intensive trade related to non-resource-based trade).

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp995.pdf
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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp995.

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Length: pages
Date of creation: 01 Jun 2010
Date of revision:
Handle: RePEc:wdi:papers:2010-995
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  1. Arik Levinson, 2006. "Unmasking the Pollution Haven Effect," Working Papers 2008-02, Department of Economics, University of Calgary, revised 01 Jan 2008.
  2. Xinpeng Xu, 2000. "International Trade and Environmental Regulation: Time Series Evidence and Cross Section Test," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(3), pages 233-257, November.
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  4. António Afonso & Christophe Rault, 2009. "Bootstrap Panel Granger-Causality between Government Budget and External Deficits for the EU," CESifo Working Paper Series 2581, CESifo Group Munich.
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  10. Jerneja Jug & Daniel Mirza, 2005. "Environmental Regulations in Gravity Equations: Evidence from Europe," The World Economy, Wiley Blackwell, vol. 28(11), pages 1591-1615, November.
  11. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
  12. 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.
  13. Josh Ederington & Arik Levinson & Jenny Minier, 2003. "Footloose and Pollution-Free," NBER Working Papers 9718, National Bureau of Economic Research, Inc.
  14. Eliste, Paavo & Fredriksson, Per G., 2002. "Environmental Regulations, Transfers, and Trade: Theory and Evidence," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 234-250, March.
  15. Mody, Ashoka & Roy, Subhendu & Wheeler, David & Dasgupta, Susmita, 1995. "Environmental regulation and development : a cross-country empirical analysis," Policy Research Working Paper Series 1448, The World Bank.
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  17. Christophe Rault & Robert Sova & Ana Maria Sova, 2009. "Modelling international trade flows between CEEC and OECD countries," Applied Economics Letters, Taylor & Francis Journals, vol. 16(15), pages 1547-1554.
  18. Richard Baldwin & Daria Taglioni, 2006. "Gravity for Dummies and Dummies for Gravity Equations," NBER Working Papers 12516, National Bureau of Economic Research, Inc.
  19. Trevor Breusch & Michael B. Ward & Hoa Thi Minh Nguyen & Tom Kompas, 2011. "FEVD: Just IV or Just Mistaken?," Monash Economics Working Papers archive-17, Monash University, Department of Economics.
  20. Mark N. Harris & László Kónya & László Mátyás, 2002. "Modelling the Impact of Environmental Regulations on Bilateral Trade Flows: OECD, 1990-1996," The World Economy, Wiley Blackwell, vol. 25(3), pages 387-405, 03.
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  23. repec:dgr:uvatin:20000069 is not listed on IDEAS
  24. Tobey, James A, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Wiley Blackwell, vol. 43(2), pages 191-209.
  25. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
  26. Yannick L'horty & Christophe Rault, 2004. "Inflation, minimum wage and other wages: an econometric study on French macroeconomic data," Applied Economics, Taylor & Francis Journals, vol. 36(4), pages 277-290.
  27. van Beers, Cees & van den Bergh, Jeroen C J M, 1997. "An Empirical Multi-country Analysis of the Impact of Environmental Regulations on Foreign Trade Flows," Kyklos, Wiley Blackwell, vol. 50(1), pages 29-46.
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