UNMASKING THE POLLUTION HAVEN EFFECT

We use theory and empirics to examine the effect of environmental regulations on trade flows. A simple model demonstrates how unobserved heterogeneity, endogeneity, and aggregation issues bias standard measurements of this relationship. A reduced-form estimate of the model, using data on U.S. regula...

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Veröffentlicht in:International economic review (Philadelphia) 2008-02, Vol.49 (1), p.223-254
Hauptverfasser: Levinson, Arik, Taylor, M. Scott
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container_title International economic review (Philadelphia)
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Taylor, M. Scott
description We use theory and empirics to examine the effect of environmental regulations on trade flows. A simple model demonstrates how unobserved heterogeneity, endogeneity, and aggregation issues bias standard measurements of this relationship. A reduced-form estimate of the model, using data on U.S. regulations and trade with Canada and Mexico for 130 manufacturing industries from 1977 to 1986, indicates that industries whose abatement costs increased most experienced the largest increases in net imports. For the average industry, the change in net imports we ascribe to regulatory costs amounting to 10% of the total increase in trade volume over the period.
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source Wiley Online Library - AutoHoldings Journals; EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing
subjects Coefficients
Cost efficiency
Economic impact analysis
Economic models
Environmental economics
Environmental policy
Environmental pollution
Environmental regulation
Environmental regulations
Estimation bias
Impact analysis
Imports
Industrial pollution
Industrial sectors
Manufacturing
Pollution control
Pollution havens
Studies
Trade flows
U.S.A
Value added
Water pollution
title UNMASKING THE POLLUTION HAVEN EFFECT
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