44th Congress of the European Regional Science Association: "Regions and Fiscal Federalism", 25th - 29th August 2004, Porto, Portugal
The delocation of firms is often viewed as a major outcome of a stiff environmental policy. In this paper, we study the impact of a strict anti-pollution policy pursued by a government on domestic firms locational decisions and determine the main variables that interact with such a policy. Some preliminary welfare implications are also provided. Keywords: Environmental policy; Plant location; Imperfect competition. JEL classification: H7; R3; D4.