Environmental Regulation and Industry Location in Europe

By Abay Mulatu, Reyer Gerlagh, Danny Rigby, A. Wossink. 2010

160 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Environmental Engineering

View Paper: https://www.semanticscholar.org/paper/1d30f169663de820d5e24f1c3a349e4c78ef19df

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In Economics and Econometrics

Citations in the corpus

Environmental Regulation and French Firms Location Abroad: An Economic Geography Model in an International Comparative Study (2012, unknown): “Mulatu et al. (2010) also suggest that their results should be further explored by examining the endogeneity of environmental policy in their framework and using panel data for more robust estimations.”
Going green or going away: Environmental regulation, economic geography and firms’ strategies in China’s pollution-intensive industries (2014, background): “One argument is that firms intend to locate their business activities in countries or regions where environmental regulations are relatively lax (Costantini and Crespi, 2008; Mulatu et al., 2010; Testa et al., 2011).”
Understanding Producers’ Motives for Adopting Sustainable Practices: The Role of Expected Rewards, Risk Perception, and Risk Tolerance (2016, methodology): “An alternative that provides similar information is the Johnson–Neyman technique (Johnson and Neyman, 1936; Hayes and Matthes, 2009; Mulatu et al., 2010), that indicates significance levels at a selected a level (probability of Type I error) of the predictor for the values of the moderator, by…”
How does Foreign Direct Investment Affect Pollution? Toward a Better Understanding of the Direct and Conditional Effects (2015, unknown): “…developed by the World Economic Forum based on a questionnaire addressed to business executives in many countries (e.g., Kellenberg 2009; Mulatu et al. 2010); (v) United Nations member country questionnaire on environmental policies, legislation and enforcement (e.g., Cole andElliott…”