Environmental Regulation and Competitiveness: Evidence from Romania
20 Pages Posted: 3 Sep 2012
There are 3 versions of this paper
Environmental Regulation and Competitiveness: Evidence from Romania
Environmental Regulation and Competitiveness: Evidence from Romania
Date Written: August 31, 2012
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).
Keywords: environmental stringency, competitiveness, gravity model
JEL Classification: F140, Q280
Suggested Citation: Suggested Citation