Environmental Regulations and Trade Patterns in Hazardous Waste: Facility-level Analysis

This paper offers a fresh look at the pollution haven hypothesis (PHH) in the context of the waste management industry. Unlike previous research examining trade in waste products, the present study distinguishes between waste destined for final disposal and waste destined for recovery. Furthermore, it combines very disaggregated data with the highly flexible mixed logit model and a reliable measure of environmental policy stringency. Including all those elements in one analysis allowed for the uncovering of the dramatic differences in the reactions of individual waste generators to the environmental policy stringency of the destination country. Although there is no evidence confirming the PHH, a significant pollution haven effect has been found. While most facilities are deterred by the environmental policy stringency, there are also waste generators attracted by strict regulations.