Environmental regulation, multinational companies and international competitiveness

Ulph, Alistair and Valentini, Laura (2000) Environmental regulation, multinational companies and international competitiveness. Southampton, UK, University of Southampton, 30pp. (Discussion Papers in Economics and Econometrics, 0037).


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Concerns have been expressed that in a global market place with mobile capital, national governments will have incentives to set weak environmental policies (“environmental dumping”) to protect the international competitiveness of their domestic firms, that these incentives are particularly strong in industries where plants may be relatively footloose, so that governments are concerned to prevent “capital flight”, and that footloose plants are particularly associated with multinational firms. It is then often suggested that appropriate policy responses would be to seek to harmonise environmental regulations or impose minimum standards for environmental regulations.

In this paper we set out these concerns in terms of a number of more precisely made claims and then review recent developments in economic analysis (including some of our own work) and empirical evidence to show that the claims cannot be generally sustained and that the suggested policies may be harmful. However, devising more appropriate policies is by no means straightforward.

Item Type: Monograph (Discussion Paper)
Additional Information: JEL Classification: F1, H4, L5, Q2
Related URLs:
Keywords: plant location, environmental policy, eco-dumping, competition
Subjects: H Social Sciences > HC Economic History and Conditions
G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HD Industries. Land use. Labor
Divisions : University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33135
Accepted Date and Publication Date:
Date Deposited: 19 Jul 2006
Last Modified: 31 Mar 2016 11:59
URI: http://eprints.soton.ac.uk/id/eprint/33135

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