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Environmental Outsourcing

Matthew Cole (), Robert Elliott () and Toshihiro Okubo ()

No DP2011-12, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: In recent years there has been a dramatic increase in the number of firms shifting stages of their production processes overseas. In this paper we investigate whether firms outsource the dirtier stages of production to minimise domestic environmental regulation costs - a process broadly consistent with the pollution haven hypothesis. We develop a theoretical model of environmental outsourcing that focuses on the roles played by firm size and productivity, transport costs and environmental regulations. We test the model's predictions using a firm-level data set for Japan and do find evidence of an 'environmental outsourcing' effect.

Keywords: Environmental regulations; Trade; Outsourcing; Firm-level. (search for similar items in EconPapers)
JEL-codes: F18 L51 L60 Q56 R3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env, nep-int, nep-reg and nep-res
Date: 2011-03
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2011-12.pdf First version, 2011 (application/pdf)

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Working Paper: Environmental Outsourcing (2010) Downloads
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