Strategic environmental policies in the presence of foreign direct investment

Kayalica M. Ö., Lahiri S.

ENVIRONMENTAL & RESOURCE ECONOMICS, cilt.30, sa.1, ss.1-21, 2005 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 30 Sayı: 1
  • Basım Tarihi: 2005
  • Doi Numarası: 10.1007/s10640-004-0757-3
  • Dergi Adı: ENVIRONMENTAL & RESOURCE ECONOMICS
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.1-21
  • Anahtar Kelimeler: environment, emission permits, foreign direct investment, trade, pollution, CROSS-BORDER POLLUTION, UNITED-STATES, LOCATION DECISIONS, EXPORT SUBSIDIES, PLANT LOCATION, REGULATIONS, TARIFFS, TRADE
  • İstanbul Teknik Üniversitesi Adresli: Evet

Özet

We analyze strategic environmental standards in the presence of foreign direct investment. A number of foreign firms located in a host country compete with a domestic firm in another country to export a homogeneous good to a third country. When the number of foreign firms is exogenous, the host country applies a stricter environmental regulation than the other producing country. However, under free entry and exit of foreign firms, the host country may apply a less severe standard under both non-cooperative and cooperative equilibrium. We also find that the nature market structure does not affect the equilibrium values of total pollution if export subsidies are also used.