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Environmental Outsourcing

Author

Listed:
  • Matthew A. Cole

    (Department of Economics, University of Birmingham, UK)

  • Robert J.R. Elliott

    (Department of Economics, University of Birmingham, UK)

  • Toshihiro Okubo

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

In recent years there has been a dramatic increase in the number of firms shifting stages of their production processes overseas. In this paper we investigate whether firms outsource the dirtier stages of production to minimise domestic environmental regulation costs - a process broadly consistent with the pollution haven hypothesis. We develop a theoretical model of environmental outsourcing that focuses on the roles played by firm size and productivity, transport costs and environmental regulations. We test the model's predictions using a firm-level data set for Japan and do find evidence of an 'environmental outsourcing' effect.

Suggested Citation

  • Matthew A. Cole & Robert J.R. Elliott & Toshihiro Okubo, 2011. "Environmental Outsourcing," Discussion Paper Series DP2011-12, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2011-12
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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2011-12.pdf
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    References listed on IDEAS

    as
    1. Tomiura, Eiichi, 2005. "Foreign outsourcing and firm-level characteristics: Evidence from Japanese manufacturers," Journal of the Japanese and International Economies, Elsevier, vol. 19(2), pages 255-271, June.
    2. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    3. Eiichi Tomiura, 2008. "Foreign outsourcing and the product cycle: evidence from micro data," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 1019-1022.
    4. Tomiura, Eiichi, 2007. "Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level," Journal of International Economics, Elsevier, vol. 72(1), pages 113-127, May.
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    Cited by:

    1. Richard T. Carson & W. Michael Hanemann, & Raymond J. Kopp & Jon A. Krosnick & Robert C. Mitchell & Stanley Presser & Paul A. Rudd & V. Kerry Smith & Michael Conaway & Kerry Martin, 1997. "Temporal Reliability of Estimates from Contingent Valuation," Land Economics, University of Wisconsin Press, vol. 73(2), pages 151-163.
    2. Toshihiro Okubo & Yuta Watabe & Kaori Furuyama, 2016. "Export of Recyclable Materials: Evidence from Japan," Asian Economic Papers, MIT Press, vol. 15(1), pages 134-148, Winter/Sp.
    3. Jota Ishikawa & Toshihiro Okubo, 2017. "Greenhouse-Gas Emission Controls and Firm Locations in North–South Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(4), pages 637-660, August.
    4. Ulltveit-Moe, Karen Helene & Forslid, Rikard & Okubo, Toshihiro, 2011. "Why are firms that export cleaner? International trade and CO2 emissions," CEPR Discussion Papers 8583, C.E.P.R. Discussion Papers.
    5. Danilo Loconsole & Giacomo Cocetta & Piero Santoro & Antonio Ferrante, 2019. "Optimization of LED Lighting and Quality Evaluation of Romaine Lettuce Grown in An Innovative Indoor Cultivation System," Sustainability, MDPI, vol. 11(3), pages 1-16, February.
    6. Ciriaci, Daria & Palma, Daniela, 2010. "Geography, environmental efficiency and Italian economic growth: a spatially-adapted Environmental Kuznets Curve," MPRA Paper 22899, University Library of Munich, Germany.
    7. Li-Chun Huang, 2019. "Consumer Attitude, Concerns, and Brand Acceptance for the Vegetables Cultivated with Sustainable Plant Factory Production Systems," Sustainability, MDPI, vol. 11(18), pages 1-14, September.
    8. Md Obyedul Kalam Azad & Katrine Heinsvig Kjaer & Md Adnan & Most Tahera Naznin & Jung Dae Lim & In Je Sung & Cheol Ho Park & Young Seok Lim, 2020. "The Evaluation of Growth Performance, Photosynthetic Capacity, and Primary and Secondary Metabolite Content of Leaf Lettuce Grown under Limited Irradiation of Blue and Red LED Light in an Urban Plant ," Agriculture, MDPI, vol. 10(2), pages 1-16, January.

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    More about this item

    Keywords

    Environmental regulations; Trade; Outsourcing; Firm-level.;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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