Raymond MacDermott, Ph.D.

Book Chapters

  • The Environment and Trade
    with Atin Basu and James Bang
    Encyclopedia of Environmental Health, under review

    This chapter will review the effects of trade and trade agreements on the environment. It shows the impact of trade on income. Income will, in turn, impact the environment. Lastly, this chapter discusses the plausibility of international trade agreements as a vehicle for environmental change.

  • Environmental regulations and the flow of FDI: The Pollution Haven Hypothesis
    Foreign Direct Investment, forthcoming

    This chapter will review what is known as the Pollution Haven Hypothesis. This hypothesis states a firm will move its production facilities to countries with relatively weak environmental regulations in order to capitalize on the lower production costs. Given the proliferation of environmental agreements both at the national and international level, their impact on international flows of investment capital is certainly of interest.
    Over the years, a variety of approaches have been taken to empirically prove the Pollution Haven Hypothesis. These range from straightforward statistical comparisons to within region studies to cross border studies. Unfortunately, at this time there is no clear consensus as to the effects of more stringent environmental regulations on the flows of FDI.
    One key issue is preventing this research from establishing a clear conclusion. That is, the difficulty in quantifying environmental regulations. The challenge here lies, first, in the subjective nature of measuring laws on the books. Beyond that, measuring the application of the laws on the books is even more elusive. A common approach is to use a proxy. However, finding a suitable one is difficult. Until a generally agreed upon approach can be found for dealing with the immeasurable nature of environmental regulations, true evidence of the Pollution Haven Hypothesis will continue to elude researchers.