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Export Processing Zones and Environmental Policy

Author

Listed:
  • Yasuyuki Sugiyama

    (Graduate School of Economics, Osaka University)

Abstract
This paper investigates the relation between an export processing zone and a pollution quota in a small country. The model suppose that the pollution target is implemented with a marketable permit system, and the government sets the quota to maximize domestic welfare. Then we show that, if an increase in real income reduces marginal external damage, the pollution quota is relieved by the formation of an export processing zone. However, if the marginal damage is augmented with an increase in the income, the optimal quota might be strengthened by the formation of the zone.

Suggested Citation

  • Yasuyuki Sugiyama, 2006. "Export Processing Zones and Environmental Policy," Discussion Papers in Economics and Business 06-22, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0622
    as

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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0622.pdf
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    References listed on IDEAS

    as
    1. Miyagiwa, Kaz F., 1986. "A reconsideration of the welfare economics of a free-trade zone," Journal of International Economics, Elsevier, vol. 21(3-4), pages 337-350, November.
    2. Brian R. Copeland & M. Scott Taylor, 2004. "Trade, Growth, and the Environment," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 7-71, March.
    3. Beladi, Hamid & Chao, Chi-Chur & Frasca, Ralph, 1999. "Foreign investment and environmental regulations in LDCs," Resource and Energy Economics, Elsevier, vol. 21(2), pages 191-199, May.
    4. Hamada, Koichi, 1974. "An economic analysis of the duty-free zone," Journal of International Economics, Elsevier, vol. 4(3), pages 225-241, August.
    5. Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
    6. repec:bla:rdevec:v:4:y:2000:i:3:p:268-78 is not listed on IDEAS
    7. Devereux, John & Chen, Lein Lein, 1995. "Export Zones and Welfare: Another Look," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 704-713, October.
    8. Albert G. Schweinberger, 2003. "Special economic zones and quotas on imported intermediate goods: a policy proposal," Oxford Economic Papers, Oxford University Press, vol. 55(4), pages 696-715, October.
    9. Din, Musleh-ud, 1994. "Export processing zones and backward linkages," Journal of Development Economics, Elsevier, vol. 43(2), pages 369-385, April.
    10. Madani, Dorsati, 1999. "A review of the role and impact of export processing zones," Policy Research Working Paper Series 2238, The World Bank.
    11. Shigemi Yabuuchi, 2000. "Export Processing Zones, Backward Linkages, and Variable Returns to Scale," Review of Development Economics, Wiley Blackwell, vol. 4(3), pages 268-278, October.
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    More about this item

    Keywords

    export processing zone; international trade; environmental policy; pollution;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

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