School of Business and Economics
Faculty of Management, Science & Technology
and University of Stellenbosch Business School
Information about this author at RePEc
NBER Working Papers and Publications
|October 2018||Exporting Pollution|
with Itzhak Ben-David, Michael Viehs: w25063
Despite awareness of the detrimental impact of CO2 pollution on the world climate, countries vary widely in how they design and enforce environmental laws. Using novel micro data about firms’ CO2 emissions levels in their home and foreign countries, we document that firms headquartered in countries with strict environmental policies perform their polluting activities abroad in countries with relatively weaker policies. These effects are stronger for firms in high-polluting industries and with poor corporate governance characteristics. Although firms export pollution, they nevertheless emit less overall CO2 globally in response to strict environmental policies at home.