Environmental Regulation and Industry Location

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.


Issue Date:
2009-01
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/47176
Total Pages:
25
JEL Codes:
O14
Note:
Replaced with revised version of paper 02/20/09.
Series Statement:
ETA
2.2009




 Record created 2017-04-01, last modified 2017-05-27

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