Footloose and Pollution-Free

Ederington, Josh; Levinson, Arik; Minier, Jenny

doi:10.3386/w9718

Cited by 108 publications

(177 citation statements)

References 7 publications

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“…All quantitative variables are in logs be geographically distant, in which case the trade costs associated with locating stages of the production chain in these countries may be prohibitive. Furthermore, there is evidence to suggest that the most highly polluting industries are not very geographically mobile, or footloose (Ederington et al 2005). Hence a globalisation strategy designed purely to exploit lax environmental standards abroad may simply not be economically worthwhile for UK firms in comparison to say, being located close to markets (Brainard 1997).…”

Section: Uk Environmental Regulations and The Internationalisation Dementioning

confidence: 97%

Environmental Regulations, Outward FDI and Heterogeneous Firms: Are Countries Used as Pollution Havens?

Manderson

Kneller

2011

Environ Resource Econ

132

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We consider whether environmental regulations influence FDI outflows from a country with stringent environmental policy. We consider this issue by incorporating the predictions from the recent heterogeneous firm models of international trade into an empirical model of outward FDI by UK firms. We find that environmental regulations are not a robustly significant determinant of the internationalisation decision. In addition, we do not find robust evidence to suggest that dirtier MNEs are more likely to locate in host countries with lax environmental policy than cleaner MNEs. However, we do uncover systematic differences in the FDI behaviour of high and low environmental cost firms in other respects.

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Section: Uk Environmental Regulations and The Internationalisation Dementioning

confidence: 97%

Environmental Regulations, Outward FDI and Heterogeneous Firms: Are Countries Used as Pollution Havens?

Manderson

Kneller

2011

Environ Resource Econ

132

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“…In fact,Ederington et al (2005),Kahn and Yoshino (2004) andEderington and Minier (2003) already find evidence that United States imports are responsive to changes in environmental stringency but they did not offer strategic behavior based estimation.…”

mentioning

confidence: 93%

FDI and environmental regulation: pollution haven or a race to the top?

2011

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Increasing foreign direct investment (FDI) flows accompanied with globalization have raised the concern of a "race to the bottom" phenomenon in environmental protection. This is because footloose investors of "dirty" industries tend to relocate to "pollution havens" of the developing world. However when pollutant is transboundary (as in the case of greenhouse gases), the source country's incentive to relocate and the recipient country's willingness to host such industries are not straightforward. This article studies the relationship between FDI and environmental regulation using a North-South market share game model in a two-country setting, when pollution is transboundary. Contrary to the pollution haven hypothesis, our model shows that if market sizes of the two countries are small, FDI will raise the emission standard of the host country, resulting in a "race-to-the-top" phenomenon; but if market sizes are large enough, FDI will not change the emission standard of the South (from its laxest form), a finding that is consistent with the "regulatory chill" argument. Equilibrium FDI is contingent on the fixed cost of FDI, as the traditional proximity-concentration tradeoff theory predicts.

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“…They find that trade has a beneficial effect on SO 2 concentration levels. Further Ederington et al (2005) argue that for most industries, pollution abatement costs are a small component of total costs, and that those industries with the largest pollution abatement costs also happen to be the least geographically mobile. Finally it has been put forward, that the "factor endowment effect"; i.e.…”

Section: Literature Reviewmentioning

confidence: 97%

“…2 The possibility of delocalizing economic activities implies that international evidence is called for. Yet most evidence is from the US (Ederington et al, 2005;Levinson and Taylor, 2008;Levinson, 2010). The seminal paper by Antweiler et al (2001) investigated the effect of trade on SO 2 concentrations using data from a large international sample of measurement installations.…”

Section: Literature Reviewmentioning

confidence: 98%