Environmental regulation and international trade: Empirical results for Germany, the Netherlands and the US, 1977-1992

Abay Mulatu; Raymond J G M Florax; Cees Withagen

doi:10.2202/1538-0645.1276

Environmental regulation and international trade: Empirical results for Germany, the Netherlands and the US, 1977-1992

Abay Mulatu, Raymond J G M Florax, Cees Withagen

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

We empirically investigate the responsiveness of international trade to the stringency of environmental regulation. Stringent environmental regulation may impair the export competitiveness of 'dirty' domestic industries, and as a result, 'pollution havens' emerge in countries where environmental regulation is relatively less stringent. We examine the impact of pollution abatement and control costs on net exports in order to grasp this phenomenon. Theoretically, our analysis is related to a general equilibrium model of trade and pollution nesting the pollution haven motive for trade with the factor endowment motive. We analyze data on two-digit ISIC manufacturing industries during the period 1977-1992 in Germany, the Netherlands and the US, and show that trade patterns in 'dirty' commodities are jointly determined by relative factor endowments and environmental stringency differentials. Copyright ©2004 by the authors. All rights reserved.

Original language	English
Article number	5
Journal	Contributions to Economic Analysis and Policy
Volume	3
Issue number	2
DOIs	https://doi.org/10.2202/1538-0645.1276
Publication status	Published - 2004

Keywords

Competitiveness
Pollution Haven
Trade

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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title = "Environmental regulation and international trade: Empirical results for Germany, the Netherlands and the US, 1977-1992",

abstract = "We empirically investigate the responsiveness of international trade to the stringency of environmental regulation. Stringent environmental regulation may impair the export competitiveness of 'dirty' domestic industries, and as a result, 'pollution havens' emerge in countries where environmental regulation is relatively less stringent. We examine the impact of pollution abatement and control costs on net exports in order to grasp this phenomenon. Theoretically, our analysis is related to a general equilibrium model of trade and pollution nesting the pollution haven motive for trade with the factor endowment motive. We analyze data on two-digit ISIC manufacturing industries during the period 1977-1992 in Germany, the Netherlands and the US, and show that trade patterns in 'dirty' commodities are jointly determined by relative factor endowments and environmental stringency differentials. Copyright {\textcopyright}2004 by the authors. All rights reserved.",

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TY - JOUR

T1 - Environmental regulation and international trade: Empirical results for Germany, the Netherlands and the US, 1977-1992

AU - Mulatu, Abay

AU - Florax, Raymond J G M

AU - Withagen, Cees

PY - 2004

Y1 - 2004

N2 - We empirically investigate the responsiveness of international trade to the stringency of environmental regulation. Stringent environmental regulation may impair the export competitiveness of 'dirty' domestic industries, and as a result, 'pollution havens' emerge in countries where environmental regulation is relatively less stringent. We examine the impact of pollution abatement and control costs on net exports in order to grasp this phenomenon. Theoretically, our analysis is related to a general equilibrium model of trade and pollution nesting the pollution haven motive for trade with the factor endowment motive. We analyze data on two-digit ISIC manufacturing industries during the period 1977-1992 in Germany, the Netherlands and the US, and show that trade patterns in 'dirty' commodities are jointly determined by relative factor endowments and environmental stringency differentials. Copyright ©2004 by the authors. All rights reserved.

AB - We empirically investigate the responsiveness of international trade to the stringency of environmental regulation. Stringent environmental regulation may impair the export competitiveness of 'dirty' domestic industries, and as a result, 'pollution havens' emerge in countries where environmental regulation is relatively less stringent. We examine the impact of pollution abatement and control costs on net exports in order to grasp this phenomenon. Theoretically, our analysis is related to a general equilibrium model of trade and pollution nesting the pollution haven motive for trade with the factor endowment motive. We analyze data on two-digit ISIC manufacturing industries during the period 1977-1992 in Germany, the Netherlands and the US, and show that trade patterns in 'dirty' commodities are jointly determined by relative factor endowments and environmental stringency differentials. Copyright ©2004 by the authors. All rights reserved.

KW - Competitiveness

KW - Pollution Haven

KW - Trade

U2 - 10.2202/1538-0645.1276

DO - 10.2202/1538-0645.1276

M3 - Article

SN - 1538-0645

VL - 3

JO - Contributions to Economic Analysis and Policy

JF - Contributions to Economic Analysis and Policy

IS - 2

M1 - 5

ER -

Environmental regulation and international trade: Empirical results for Germany, the Netherlands and the US, 1977-1992

Abstract

Keywords

UN SDGs

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