Environmental Regulation and Competitiveness: Evidence from Romania

By Mohamed Arouri, Guiglielmo Maria Caporale, Christophe Rault, Robert Sova, A. Sova. Social Science Research Network, 2012

121 citations recorded by the source corpus.

According to the pollution haven hypotheses differences in environmental regulation affect trade flows and plant location. Specifically, environmental stringency should decrease exports and increase imports of "dirty" goods. This paper estimates a gravity model to establish whether the implementation of more stringent regulations in Romania has indeed affected its competitiveness and decreased exports towards its European trading partners. Our findings do not provide empirical support to the pollution haven hypothesis, i.e. environmental stringency is not found to affect significantly total trade, or its components (pollution intensive trade and pollution intensive trade related to non-resource-based trade).

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/4615f02eef4f624848d9e84c4445e9c6dec8dd83