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Have Countries with Lax Environmental Regulations a Comparative Advantage in Polluting Industries?
Authors:
Thomas Sterner
Summary:
In this brief we report the results of an empirical study of a crosssection of 71 developed and developing countries in the year 2000. We investigate to what extent differences in environmental policy among countries are a source of comparative advantage. The underlying hypothesis asserts that lax environmental standards extend the availability of environmental inputs in the production process, reducing environmental control costs that increase net exports in pollution-intensive sectors—the so-called “pollution-haven effect". Although some theoretical research supports this proposition, empirical studies have not found robust results corroborating the hypothesis.
Date:
2009/15/09
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