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, indica...

In an increasingly integrated world, falling trade barriers mean that the role environmental regulations play in shaping a country’s comparative advantage is greater than ever. This has lead to fears that “dirty” industries will relocate to developing regions where environmental regulations may be less stringent. A number of reasons have been offered to explain why, despite anecdotal evidence a...

This paper presents evidence on whether multinationals are flocking to developing country "pollution havens". We begin with data from four developing countries, examining the pattern of foreign investment in Mexico, Venezuela, Morocco and Cote d'Ivoire. We find almost no evidence that foreign investors are concentrated in "dirty" sectors. We then examine the behavior of multinationals located i...

The relationship between trade expansion and environmental protection has been characterised by two extreme viewpoints – promoting trade worsens environmental conditions and higher environmental standards impose an economic cost. Two conflicting hypothesis emerge from the debate. One manifestation of the above-described trade off is the hypothesis that increasing trade may encourage developing ...

Department of Neurology and PVA/EPVA Center for Neuroscience Research, Yale University School of Medicine, New Haven and Rehabilitation Research Center, VA Connecticut Healthcare System, West Haven, CT, USA Correspondence to: Stephen G. Waxman, MD, PhD, Department of Neurology LCI 707, Yale University School of Medicine, 333 Cedar Street, PO Box 208018, New Haven, CT 06520-8018, USA E-mail: ste...