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Article Dans Une Revue Resource and Energy Economics Année : 2023

International production chains and the pollution offshoring hypothesis: An empirical investigation

Aurélien Saussay
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Résumé

Most analyses of the impact of heterogeneous environmental policy stringency on the location of industrial firms have considered the relocation of entire activities – the well-known pollution haven hypothesis. Yet international enterprises may decide to only offshore a subset of their production chain – the so-called pollution offshoring hypothesis (POH). We introduce a simple empirical approach to test the POH combining a comprehensive industrial mergers and acquisitions dataset, a measure of sectoral linkages based on input-output tables and an index score of environmental policy stringency. Our results confirm the impact of relative environmental policy stringency on firms’ decisions to engage in cross-country M&As. Our findings also indicate that environmental taxation have a stronger impact on international investment decisions than standards-based policies. Further, we find that transactions involving a target firm operating in a sector upstream of the acquirer are more sensitive to environmental policy stringency, especially when that sector is highly pollution-intensive. This empirical evidence is consistent with the pollution offshoring hypothesis.

Dates et versions

hal-04106308 , version 1 (25-05-2023)

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Aurélien Saussay, Natalia Zugravu-Soilita. International production chains and the pollution offshoring hypothesis: An empirical investigation. Resource and Energy Economics, 2023, 73, ⟨10.1016/j.reseneeco.2023.101357⟩. ⟨hal-04106308⟩
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