Environmentalism and Restructuring of the Global Pulp and Paper Industry

A case study of the global pulp and paper industry is used to examine the implications of environmentalism for corporate strategy in the restructuring process. Previous economic analyses concerned with the dispersion of pollution‐intensive industries from countries with strict environmental regulations to developing countries with weak environmental legislation, the so‐called pollution havens, have shown that there is little or no significant causal relationships between the costs of regulation and the observed dispersion. Competing hypotheses of the environment–competitiveness linkage suggest instead that demand, resource endowment, and cheaper labour and construction costs for highly capital intensive industries are more persuasive factors in explaining the dispersion of dirty industries. In this study environmentalism is defined to encompass non‐quantifiable variables involving stakeholder pressures from both consumers and governments. Environmentalism is shown to have significant implications for changes in spatial patterns of production in the pulp and paper industry and for an emerging pattern of international trade in wastepaper which has been recovered under the guise of environmentalism.