Trade Policy and Industrial Pollution in Latin America: Where Are the Pollution Havens?

Birdsall, Nancy; Wheeler, David

doi:10.1177/107049659300200107

Cited by 538 publications

(315 citation statements)

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“…In their classical study, Grossman and Krueger (1993) …nd no evidence to suggest that higher pollution abatement costs in the US had a signi…cant impact on imports from Mexico or from maquiladora sectors in particular. Birdsall and Wheeler (1993) …nd similar results in their study of Latin America, arguing that closed economies are more likely to favor pollution intensive industries, while openness actually encourages cleaner industry through the importation of developed-country pollution standards. In contrast, Low and Yeats (1992) do …nd some evidence of an association between the rise in environmental control costs in developed countries and the creation of pollution havens in poor countries.…”

Section: Motivation and Literature Reviewsupporting

confidence: 62%

What is the environmental performance of firms overseas? An empirical investigation of the global gold mining industry

Koop

Tole

2008

J Prod Anal

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Using a large plant level data set, this paper carries out an econometric analysis of the environmental performance of multinational …rms in the gold mining industry worldwide. The aim of the analysis is to determine if, by looking at the actual environmental performance of …rms (as opposed to inferring such behavior from location decisions), we can shed any light on important questions in the literature on …rm location decisions: Do pollution havens exist in the gold mining industry? Do foreign controlled gold mines perform environmentally worse or better than their domestic counterparts? We develop di¤erent ways of measuring environmental performance within the context of a Bayesian stochastic production frontier approach. In particular, we derive di¤erent ways of measuring technical and environmental e¢ ciency. When we implement these methods in our empirical work, we …nd that results are robust across di¤erent models and ways of measuring e¢ ciency. We …nd that gold mines exhibit a wide range of environmental e¢ ciencies; some are clearly more e¢ cient than others, in other words. However, and most importantly for our questions, we …nd that this variation in e¢ ciencies cannot be systematically related to mine characteristics such as whether they are foreign or domestically controlled or whether they are located in developed or developing countries.Keywords: Bayesian stochastic frontier analysis; e¢ ciency; environmental regulations and plant performance; pollution havens; regulatory chill; gold mining.JEL Classi…cation: Q3, Q56, C11, C23. 2This paper attempts to shed light on important economic and environmental policy questions as: Do …rms operating in developing countries behave di¤erently from those operating in developed countries? Do foreign controlled …rms exhibit di¤erent environmental performance from domestically controlled ones?The answers to these questions have immense economic, welfare and environmental implications for rich and poor countries alike. In this paper, we address these questions using a new data set of gold mines worldwide. From a …rm decision and environmental perspective, the gold mining industry provides an important case study for analysis of these questions: a) It is truly global in the extent of its reach. b) It produces substantial environmental pollution and degradation in comparison to other types of economic activity. Recently, there has been much public concern over and media interest in the environmental costs of gold production, especially in the developing world. For example, the New York Times has recently run a series of articles on the environmental and social impacts of multinational gold mining …rms (see New York Times 2006a,b; 2005a,b,c). It alleges that many …rms -a large number of them Fortune 500 …rms -are breaching national environmental regulations, causing serious pollution and environmental degradation in the process. These claims have been vigorously denied by the companies themselves. In response to the accusations, the world's largest gold pr...

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Section: Motivation and Literature Reviewsupporting

confidence: 62%

What is the environmental performance of firms overseas? An empirical investigation of the global gold mining industry

Koop

Tole

2008

J Prod Anal

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“…These include low gradual dependence on natural resources, increasing importance of government sector in the economy, and an increase in the importance of formal education reflected in the economy.  Birdsall and Wheeler [4], Lee and Ronal-Holst [5], and Jones and Rodolfo [6] all have indicated that in theory, foreign trade has an effect on economic expansion proportionate to expansion in production(especially industrial) as a result of external demands for products and services; that is, these economic activities have a direct impact on pollution. Foreign trade also results in decomposition, which must be understood as the decline of the great centers of world production due to migration to other countries with comparative advantages over the country of origin; this serves to increase the foreign trade between countries, but also spreads and increas-es pollution, known as the "Pollution Haven Hypothesis".…”

Section: Economic Growthmentioning

confidence: 99%

Relationship between the Environment and Economic Growth in China via Exports: A Perspective of Ecological Impact (2000-2014)

Valadez¹,

Hu²

2016

JEP

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China's swift and substantial economic growth over the past 20 years has made the country one of the top industrial powers in the world, second only the United States. From the perspective of ecology and the impact on the environment produced by economic and industrial growth, the exports that have driven rapid growth have also resulted in an alarming level of environmental pollution in major Chinese cities. Research has shown that the Chinese government's investment in bringing down pollution levels has been insufficient and ineffective. The monetary amount allocated for pollution reduction has barely reached 0.15% of the country's GDP and has failed to meaningfully reverse the effects of industrialization, including increased exports and economic growth rates affecting China's ecology. The present study investigated China's ecological situation in terms of the industrial production that has generated its level of exports, with special focus on problems related to water, air, and solid waste. An econometric analysis was conducted to determine the relationship between the main variables. The exports and GDP (dependent variable), air pollution, water pollution, and industrial solid waste (independent variables) were provided by the Institute of Statistics and the Environment Institute of China for this study. The data was managed in Econometric Eviews 7.0 software and yielded an adjusted R 2 of 96.09% (high correlation) with an interesting correlation between the exports and three independent variables; after subsequent variable analysis, we found that investments in water and industrial solid waste were not significant (i.e., that said investments have failed to solve the pollution problem). It is necessary to review the Chinese investment policy with special attention to these variables to appropriately respond to China's ecological crisis.

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“…For example, Birdsall and Wheeler (1993), drawing on case studies and econometric evidence, claim that increased foreign investment in Latin America has not led to an increase in pollution-intensive industrialization (see also Walter 1978). Similarly, Wheeler (2001) comparing data for trends in air quality in the United States versus China, Brazil and Mexico (then the largest recipients of foreign investment in the developing world) found that air quality had actually improved from the 1980s through the mid-1990s in all four countries (see also Mani and Wheeler 1998).…”

Section: The Pollution Haven Hypothesismentioning

confidence: 99%

Mapping international flows of electronic waste

Lepawsky

Mcnabb

2010

Canadian Geographies / Géographies canadiennes

146

101

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Trade Policy and Industrial Pollution in Latin America: Where Are the Pollution Havens?

Cited by 538 publications

References 0 publications

What is the environmental performance of firms overseas? An empirical investigation of the global gold mining industry

What is the environmental performance of firms overseas? An empirical investigation of the global gold mining industry

Relationship between the Environment and Economic Growth in China via Exports: A Perspective of Ecological Impact (2000-2014)

Mapping international flows of electronic waste

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