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Environmental Regulation and Competitiveness: Evidence from Romania

Author

Listed:
  • Caporale, Guglielmo Maria

    (Brunel University)

  • Rault, Christophe

    (University of Orléans)

  • Sova, Robert

    (CREST & University of Paris 1 Panthéon-Sorbonne)

  • Sova, Anamaria

    (E.B.R.C. Bucharest)

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).

Suggested Citation

  • Caporale, Guglielmo Maria & Rault, Christophe & Sova, Robert & Sova, Anamaria, 2010. "Environmental Regulation and Competitiveness: Evidence from Romania," IZA Discussion Papers 5029, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5029
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    More about this item

    Keywords

    gravity model; environmental stringency; competiveness;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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