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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/54922
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| Title: | | Developing country second-mover advantage in competition over environmental standards and taxes  |
| Authors: | | Groenert, Valeska Zissimos, Benjamin |
| Issue Date: | | 2011 |
| Series/Report no.: | | CESifo working paper: Public Finance 3686 |
| Abstract: | | We show that, in competition between a developed country and a developing country over environmental standards and taxes, the developing country may have a second-mover advantage. In our model, firms do not unanimously prefer lower environmental-standard levels. We introduce this feature to an otherwise familiar model of fiscal competition. Four distinct outcomes can be characterized by varying the marginal cost to firms of an environmental externality: (1) the outcome may be efficient; (2) the developing country may be a pollution haven - a place to escape excessively high environmental standards in the developed country; (3) the developing country may undercut the developed country and attract all firms; (4) the developed country may be a pollution haven. |
| Subjects: | | environmental standards fiscal competition second-mover advantage tax competition |
| JEL: | | H10 H25 H73 H87 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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