Pollution haven hypothesis and the role of dirty industries in Turkey's exports

Abstract

Pollution haven hypothesis argues that the industries that are highly pollution intensive i.e. dirty industries, have been migrating from developed economies to the developing world. It is argued that the environmental concerns of the developed economies caused them to enact strict environmental regulations, which have increased the cost of production of the dirty industries at home. On the other hand, the developing countries with their low wages and lax environmental regulations have been attractive alternative producers in these sectors. At the same time this migration is also beneficial for developing countries that are in need of financial resources for industrial development. Consequently, developing countries provide pollution havens for dirty industries. In this process while the dirty industries have been migrating to the developing countries, the developed countries also have become net importers of these sectors. In this study the pollution haven argument for Turkey, for 1994-1997 period is examined. The study focuses on the pollution haven hypothesis from trade perspective by looking at the manufacturing industry data at 4-digit ISIC detail by using the panel data approach. It is found that exports increase as the dirtiness of the industries increases, providing some evidence for the pollution haven hypothesis.

Do environmental regulations influence the competitiveness of pollution-intensive products?

“…The first measurement is to estimate the pollution intensity of product, that is calculating the emissions released from per unit of production. The second method is to measures the pollution content by means of pollution abatement and control expenditures (PACE), which captures the producer's cost burden of pollution regulation (Akbostanci et al, 2007). Low (1992) calculated relative abatement costs for US industries, and according to Low's calculation, Busse (2004) classified the dirty industries, which is abatement costs of at least 1.8% of total costs, including: industrial chemicals industry, paper and pulp industry, non-metallic minerals industry, iron and steels industry, and non-ferrous metals industry.…”

The energy efficiency advantage of foreign-invested enterprises in China and the role of structural differences

“…e.g. Cole, 2004;He, 2006;Akbostanci, Tunc, & Asik, 2007). Our results suggest, in some contrast, that nonprocessing production of FIEs in China may produce a slightly 'cleaner' basket of products than do domestic enterprises.…”

Relationship Between Trade, Investment and Environment: A Review of Issues

“…Kellenberg (2009) has also observed that US MNC production is negatively influenced by more stringent environmental policy. Similarly, growing pollution intensity can considerably explain Turkey's export pattern (Akbostanci et al, 2004). North-South trade in metal waste and scrap is also worth mention, where South processes the toxic wastes and the final product reaches the North.…”