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Location decision of polluting firms and environmental policy

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  • Francesco Prota

    ()

  • Francesco Contò

    ()

Abstract

The delocation of firms is often viewed as a major outcome of a stiff environmental policy. In this paper, we study the impact of a strict anti-pollution policy pursued by a government on domestic firms locational decisions and determine the main variables that interact with such a policy. Some preliminary welfare implications are also provided. Keywords: Environmental policy; Plant location; Imperfect competition. JEL classification: H7; R3; D4.

Suggested Citation

  • Francesco Prota & Francesco Contò, 2004. "Location decision of polluting firms and environmental policy," ERSA conference papers ersa04p413, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa04p413
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa04/PDF/413.pdf
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    References listed on IDEAS

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    1. Markusen James R. & Morey Edward R. & Olewiler Nancy D., 1993. "Environmental Policy when Market Structure and Plant Locations Are Endogenous," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 69-86, January.
    2. Rauscher, Michael, 1994. "Environmental Regulation and the Location of Polluting Industries," CEPR Discussion Papers 1032, C.E.P.R. Discussion Papers.
    3. Motta, Massimo & Thisse, Jacques-Francois, 1994. "Does environmental dumping lead to delocation?," European Economic Review, Elsevier, vol. 38(3-4), pages 563-576, April.
    4. Markusen, James R. & Morey, Edward R. & Olewiler, Nancy, 1995. "Competition in regional environmental policies when plant locations are endogenous," Journal of Public Economics, Elsevier, vol. 56(1), pages 55-77, January.
    5. Michael Rauscher, 1995. "Environmental regulation and the location of polluting industries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 229-244, August.
    6. Carraro, C. & Soubeyran, A., 1998. "R&D Cooperation, Innovation Spillovers and Firm Location in a Model of Environmental Policy," G.R.E.Q.A.M. 98a43, Universite Aix-Marseille III.
    7. 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.
    8. Kennedy Peter W., 1994. "Equilibrium Pollution Taxes in Open Economies with Imperfect Competition," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 49-63, July.
    9. Oates, Wallace, 2001. "A Reconsideration of Environmental Federalism," Discussion Papers dp-01-54, Resources For the Future.
    10. Hoel, Michael, 1997. " Environmental Policy with Endogenous Plant Locations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 241-259, June.
    11. Nannerup, Niels, 2001. "Equilibrium pollution taxes in a two industry open economy," European Economic Review, Elsevier, vol. 45(3), pages 519-532, March.
    12. Franciosi Robert & Isaac R. Mark & Pingry David E. & Reynolds Stanley S., 1993. "An Experimental Investigation of the Hahn-Noll Revenue Neutral Auction for Emissions Licenses," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 1-24, January.
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    More about this item

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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