Environmental Standards and Trade: Evidence from Indian Textile & Leather Industry (original) (raw)
We use a …rm-level data set comprising of leather and textile sector of India for the period 1989-2003 to test the eect on industries dominated with small and medium-sized …rms with respect to stringent compulsory technical envi- ronmental standards. We consider both foreign and domestic regulations. We also explored how the enforcement eect varies across …rms of dierent size. We …nd (a) the regulations did add to the pollution-abatement cost of the …rms'signi…cantly, and also increased the export revenues, but exerted a neg- ative in‡uence on productivity level of the …rms, (b) the pollution-abatement cost of a …rm, its R&D expenditure, productivity and total cost signi…cantly account for the exit decision of a …rm, and (c) there is a signi…cant amount of heterogeneity involved in the eect of the regulations on the dierent size
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