UNMASKING THE POLLUTION HAVEN EFFECT*
Open accessAbstract
We use theory and empirics to examine the effect of environmental regulations on trade flows. A simple model demonstrates how unobserved heterogeneity, endogeneity, and aggregation issues bias standard measurements of this relationship. A reduced‐form estimate of the model, using data on U.S. regulations and trade with Canada and Mexico for 130 manufacturing industries from 1977 to 1986, indicates that industries whose abatement costs increased most experienced the largest increases in net imports. For the average industry, the change in net imports we ascribe to regulatory costs amounting to 10% of the total increase in trade volume over the period.
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- Authors
- Levinson, A., & Taylor, M. S.
- Affiliations
- University of Calgary (CA)
- Corresponding author
- Taylor, M. Scott
- Venue
- International Economic Review
- Publisher
- Wiley
- Published
- 2008-02
- Volume
- 49
- Issue
- 1
- Pages
- 223-254
- ISSN
- 0020-6598 (ISSN-L)
- 1468-2354
- OpenAlex
- W2119106412
- Cited by
- 1,112
- References
- 2
- Citations by year
- 2026: 74 · 2025: 93 · 2024: 86 · 2023: 97 · 2022: 112 · 2021: 93 · 2020: 56 · 2019: 49 · 2018: 44 · 2017: 39 · 2016: 39 · 2015: 50 · 2014: 48 · 2013: 44 · 2012: 49
- FWCI
- 83.08
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- International Economic Review (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Energy, Environment, Economic Growth
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Keywords
- pollution haven effect, environmental regulation, trade flows, regulatory costs, abatement costs, unobserved heterogeneity, endogeneity, aggregation bias, manufacturing industry, net imports
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