Trade, cluster and environmental product standard

Jinhao Liu, Toshiyuki Fujita

Research output: Contribution to journalArticle

Abstract

This study investigates the impact of environmental product standards on environment and firm locations in an NEG (New Economic Geography) framework. Introducing unilateral environmental product standards and consumption externalities into a footloose capital model, we find that their effect depends on the degree of compliance of the standards and trade cost. Environmental product standards could reduce firm share and emissions in a regulated region when most firms comply with them. When the standards are not widely complied with, their effect depends on trade cost. It is possible that the unilateral standards raise the number of firms in a regulated region and worsen the environment in that region when trade cost is sufficiently small. These results could be useful for evaluating the implementation of environmental product standards as an environmental policy.

Original languageEnglish
Pages (from-to)655-679
Number of pages25
JournalEnvironmental Economics and Policy Studies
Volume20
Issue number3
DOIs
Publication statusPublished - Jul 1 2018

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cost
economic geography
environmental policy
compliance
firm
product standard
Product standards
Trade costs
effect
externality
consumption
Firm location
Consumption externalities
New economic geography
Environmental policy

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

Cite this

Trade, cluster and environmental product standard. / Liu, Jinhao; Fujita, Toshiyuki.

In: Environmental Economics and Policy Studies, Vol. 20, No. 3, 01.07.2018, p. 655-679.

Research output: Contribution to journalArticle

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