Pollution Haven and Corruption Paradise

Autor: Fabien Candau, Elisa Dienesch
Přispěvatelé: Centre d'Analyse Théorique et de Traitement des données économiques (CATT), Université de Pau et des Pays de l'Adour (UPPA)
Jazyk: angličtina
Rok vydání: 2016
Předmět:
Zdroj: Journal of Environmental Economics and Management
Journal of Environmental Economics and Management, Elsevier, 2017, 85, pp.171-192. ⟨10.1016/j.jeem.2017.05.005⟩
ISSN: 0095-0696
1096-0449
Popis: In this paper, we propose a new perspective to analyze the impact of institutions, environmental standards, and globalization on relocations of polluting firms in countries with lax environmental regulation (called pollution havens). Via a simple theoretical extension from the Economic Geography literature, we characterize the main features of pollution havens: a good market access to high-income countries and corruption opportunities. Using structural and reduced-form estimations, we analyse these determinants by exploiting a unique database on the number of European affiliates located abroad. A 1% increase in access to the European market from a pollution haven fosters relocation there by 0.1%. We also fifind that corruption in these countries lowers environmental standards, which strongly attract polluting fifirms: a 1% increase in this indirect effect of corruption fuels relocation by 0.28%. We test the economic significance of these empirical fifindings via simulations. The protection of the European market (e.g., a carbon tax on imports) to stop relocations to pollution havens must be high (a decrease of the European market for Morocco and Tunisia equivalent to 13%) not to say prohibitive (31% for China).
Databáze: OpenAIRE
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