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Environmental Regulation and Competitiveness: Evidence from RomaniaGuglielmo Maria CaporaleLondon South Bank University; Brunel University - Brunel Business School; CESifo (Center for Economic Studies and Ifo Institute for Economic Research) Christophe RaultUniversity of Orleans; Université d'Évry - Centre D'Etudes des Politiques Economiques et de L'Emploi (EPEE); Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA); Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute for Economic Research) Robert SovaAcademy of Economic Studies; Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques Anamaria SovaBucharest Academy of Economic Studies; CES Sorbonne University IZA Discussion Paper No. 5029 Abstract: 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).
Number of Pages in PDF File: 22 Keywords: environmental stringency, competiveness, gravity model JEL Classification: F14, Q28 working papers seriesDate posted: July 6, 2010Suggested CitationContact Information
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