EU air pollution regulation: A breath of air for East-European polluting industries?

Mardi | 2015-12-15
Sully 5 de 16h à 17h20


In this paper we test whether tighter EU environmental regulation fosters pollution havens in ECA countries. By making an assumption on which sectors are more affected by environmental regulation, we provide robust evidence that ECA polluting industries benefit from EU environmental stringency. Moreover, we propose an original and relevant variable that evaluates environmental regulation stringency and limits simultaneity issues, based on the EU Air Quality Framework Directive. Finally, we use a wide range of fixed effects and instrumental variable approach to control for potential bias due to omitted variables and reverse causality.