Environmental Regulation and Competitiveness: Evidence from Romania

20 Pages Posted: 3 Sep 2012

See all articles by Mohamed El Hedi Arouri

Mohamed El Hedi Arouri

EDHEC Business School

Guglielmo Maria Caporale

Brunel University London - Department of Economics and Finance; London South Bank University; CESifo (Center for Economic Studies and Ifo Institute); German Institute for Economic Research (DIW Berlin)

Christophe Rault

IZA Institute of Labor Economics; University of Orleans; CESifo (Center for Economic Studies and Ifo Institute)

Robert Sova

Academy of Economic Studies; Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques

Anamaria Sova

Bucharest Academy of Economic Studies; CES Sorbonne University

Multiple version iconThere are 3 versions of this paper

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

Arouri, Mohamed El Hedi and Caporale, Guglielmo Maria and Rault, Christophe and Rault, Christophe and Sova, Robert and Sova, Anamaria and Sova, Anamaria, Environmental Regulation and Competitiveness: Evidence from Romania (August 31, 2012). CESifo Working Paper Series No. 3916, Available at SSRN: https://ssrn.com/abstract=2140746 or http://dx.doi.org/10.2139/ssrn.2140746

Mohamed El Hedi Arouri

EDHEC Business School ( email )

58 rue du Port
Lille, 59046
France

Guglielmo Maria Caporale

Brunel University London - Department of Economics and Finance ( email )

Kingston Lane
Marie Jahoda Building
Uxbridge, Middlesex UB8 3PH
United Kingdom
+44 1895 266713 (Phone)
+44 1895 269770 (Fax)

HOME PAGE: http://www.brunel.ac.uk/about/acad/bbs/bbsstaff/ef_staff/guglielmocaporale/

London South Bank University ( email )

Centre for Monetary and Financial Economics
London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Christophe Rault (Contact Author)

University of Orleans ( email )

Rue de Blois
BP 6739
LEO, Orleans, Orleans cedex 2 45067
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Robert Sova

Academy of Economic Studies ( email )

6 Piata Romana, 1-st District, PO 22
Bucharest, 010374
Romania

HOME PAGE: http://www.cig.ase.ro

Université Paris I Panthéon-Sorbonne - Centre Maison des Sciences Economiques

106/112 boulevard de l'Hopital
Paris Cedex 13, 75647
France

Anamaria Sova

CES Sorbonne University ( email )

106-112 bd. de l'Hopital, 75647, Paris, cedex 13
Paris
France

Bucharest Academy of Economic Studies

6, Romana Square, District 1
Bucharest, 010374
Romania

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