Cooperation in environmental policy: a spatial approach

Ronald Davies and Helen Naughton

International Tax and Public Finance, 2014, vol. 21, issue 5, 923-954

Abstract: Inefficient competition in emissions taxes for foreign direct investment creates benefits from international cooperation. In the presence of cross-border pollution, proximate (neighboring) countries have greater incentives to cooperate than distant ones as illustrated by a model of tax competition for mobile capital. Spatial econometrics is used to estimate participation in 110 international environmental treaties by 139 countries over 20 years. Empirical evidence of increased cooperation among proximate countries is provided. Furthermore, strategic responses in treaty participation vary across country groups between OECD and non-OECD countries and are most evident in regional agreements. Copyright Springer Science+Business Media New York 2014

Keywords: Environmental agreements; Foreign direct investment; Spatial econometrics; F53; Q58 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (15)

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Working Paper: Cooperation in Environmental Policy: A Spatial Approach (2003)
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DOI: 10.1007/s10797-013-9280-1

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