Do Environmental Regulations Affect the Decision to Export?

Jevan Cherniwchan and Nouri Najjar

American Economic Journal: Economic Policy, 2022, vol. 14, issue 2, 125-60

Abstract: This paper investigates how a common form of environmental regulation—air quality standards—affects exporters. We develop a simple theoretical model to show how the design of these standards causes (i) some firms to stop exporting and (ii) a reduction in the export volumes of affected continuing exporters. We exploit quasi-experimental variation resulting from the design of Canadian air quality standards to test these predictions empirically. Our estimates confirm our model's predictions: we find that for the most affected manufacturers, regulation reduced export volumes by 32 percent and increased the likelihood plants stop exporting by 5 percentage points.

JEL-codes: D12 F14 F18 Q53 Q58 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (21)

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DOI: 10.1257/pol.20200290

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