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Session 4: Effect of Environmental Regulation on Productivity and Competitiveness
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THE PORTER HYPOTHESIS AT 20:
THE EFFECT OF ENVIRONMENTAL REGULATION
ON PRODUCTIVITY AND COMPETITIVENESS
Miguel Quiroga
Economics Department, Universidad de Concepcion
Porte
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RESEARCH BACKGROUND
Joint with Thomas Sterner and Martin Persson
It is based in the Heckscher-Ohlin-Vanek model of trade.
Country’s net exports are expressed as a linear function of environmental endowments.
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ISSUES
• We have been testing an incorrect HOV equation. The correct factor content of trade definition includes a consumption condition that could be correlated with the environmental endowment (Trefler and Zhu, 2006).
• Parameters estimated using OLS would be downwards biased, increasing the possibility to find no evidence of pollution haven or the opposite result.
• Industrial aggregation matters
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