トッテナム対クリスタル・パレス

Title Pollution Havens and Industrial Agglomeration Abstract Pollution-intensive industries are generally characterized by imperfect competition, increasing returns to scale and large transportation costs. We investigate two countries, N and S, each with two sectors. Manufacturing generates cross-border pollution which reduces agricultural production. Firms can freely move across country borders, but not workers. First, we show that pollution lowers local income since it reduces agricultural production. This income-reduction effect discourages firms to move to the country with laxer environmental regulations that generate more pollution. Second, our analysis demonstrates that manufacturing agglomeration forces can alleviate the pollution haven effect. And a pollution haven may not arise, if environmental regulation is slightly more stringent in the larger country N than in the smaller country S. These results are strongly supported by recent empirical findings. In addition, the model predictions call for international cooperation of environmental policies, especially when trade becomes freer. Keywords: Pollution �@�@�@�@�@�@ Industrial Agglomeration �@�@�@�@�@�@ Trade Costs �@ JEL Classification: Q5, R3 Dao-Zhi ZENG Graduate School of Management, Kagawa University Laixun ZHAO Research Institute for Economics and Business Administration Kobe University Rokkodai-cho, Nada-ku, Kobe 657-8501 Japan Phone: (81) 78 803 7036 Fax: (81) 78 803 7059