International Competition and Environmental Expenditures: Empirical Evidence from Indonesian Manufacturing Plants

Kai Kaiser and Günther Schulze

No 26255, Discussion Paper Series from Hamburg Institute of International Economics

Abstract: This paper analyzes environmental expenditures in Indonesia - a significant newly industrializing economy - reported at the plant level comprising all 23 thousand manufacturing establishments with more than 20 employees. Since compliance is barely enforced, pollution abatement expenditures are effectively voluntary in nature. This allows us to test whether foreign owned firms expend more due to a technology that adheres to stricter Western standards or whether the predominant effect is that both foreign and domestic exporting companies are more environmentally conscious due to better technology transfer or green consumerism in the Western countries. If so, this would contradict conventional wisdom that environmental expenditures reduce competitiveness and that increased levels of foreign direct investment or export-orientation in manufacturing will necessarily pre-empt firms from behaving in a "greener" fashion.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 26
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Working Paper: International Competition and Environmental Expenditures: Empirical Evidence from Indonesian Manufacturing Plants (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:hwwadp:26255

DOI: 10.22004/ag.econ.26255

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