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Environmental Regulation and Industry Location

Abay Mulatu (), Reyer Gerlagh, Dan Rigby and Ada Wossink

No 2009.2, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper estimates the effect of environmental regulation on industry location and compares it with other determinants of location such as agricultural, education and R&D country characteristics. The analysis is based on a general empirical trade model that captures the interaction between country and industry characteristics in determining industry location. The Johnson-Neyman technique is used to fully explicate the nature of the conditional interactions. The model is applied to data on 16 manufacturing industries from 13 European countries. The empirical results indicate that the pollution haven effect is present and that the relative strength of such an effect is of about the same magnitude as other determinants of industry location. A significant negative effect on industry location is observed only at relatively high levels of industry pollution intensity.

Keywords: Pollution Haven Hypothesis; Comparative Advantage; Industry Location (search for similar items in EconPapers)
JEL-codes: O14 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-env, nep-reg and nep-ure
References: View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

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