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Environmental Regulation and Competitiveness: Evidence from Romania

Author

Listed:
  • Mohamed El Hedi Arouri
  • Guglielmo Maria Caporale
  • Christophe Rault
  • Robert Sova
  • Anamaria Sova
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

  • Mohamed El Hedi Arouri & Guglielmo Maria Caporale & Christophe Rault & Robert Sova & Anamaria Sova, 2012. "Environmental Regulation and Competitiveness: Evidence from Romania," CESifo Working Paper Series 3916, CESifo.
    • Handle: RePEc:ces:ceswps:_3916
    as

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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    environmental stringency; competitiveness; gravity model;
    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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