Environmental regulation and international competitiveness: Cross-industry and cross-country analyses
Han, Ki-Ju
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Permalink
https://hdl.handle.net/2142/20129
Description
Title
Environmental regulation and international competitiveness: Cross-industry and cross-country analyses
Author(s)
Han, Ki-Ju
Issue Date
1996
Doctoral Committee Chair(s)
Braden, John B.
Department of Study
Economics
Discipline
Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, Commerce-Business
Political Science, International Law and Relations
Political Science, Public Administration
Environmental Sciences
Language
eng
Abstract
The main purpose of this dissertation is to examine one of the hottest issues in environmental and international economic literature that deals with whether environmental regulations disadvantage a nation's trade position. The issue is not a conclusion but a hypothesis that is susceptible to empirical investigation. Thus, this thesis aims at improving on past efforts at empirical investigation by employing better models and data, and providing fresh insight into this important policy issue.
Although the dissertation focuses on the empirical study of effect of environmental regulations on trade, we explored the factors that influence the regulatory stringency and how they are related to each other as well. This theoretical work is discussed in Chapter 2. We identified a number of factors influencing regulatory stringency. They include sensitivity to pollution, industrial structure, pollution density, and so on. Of most interest is a finding that in the case of developed countries, per capita GNP may not accurately represent the regulatory stringency. This implies that using per capita GNP as a proxy for the regulatory stringency in the analysis of the relationship between environmental regulation and trade might be misleading.
In Chapter 3, we examine the hypothesis that environmental regulations of the U.S. significantly affect international competitiveness of domestic industries. We also test the hypothesis that the extent of the effect has decreased in recent years. Based on the cross-industry Heckscher-Ohlin theoretical framework, we have tested these hypotheses using panel data for U.S. manufacturing industries. Our empirical results provide the evidence that supports both hypotheses. In other words, the effect was significant in the past, but not any more.
In Chapter 4, we developed an index that can represent the regulatory stringency for 41 countries and tested the hypothesis that international competitiveness is significantly eroded by environmental regulations across countries. Our empirical test based on the Heckscher-Ohlin-Vanek model does not give strong support to the hypothesis. Notwithstanding, the results of the test suggest that polluting industries are affected by environmental regulations substantially more than non-polluting industries.
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