multiple environmental policies and pollution haven hypothesis evidence from china s polluting industries abstract theoretical studies of pollution haven hypothesis predict that differentiated environmental regulation policies will result in inter country relocation of polluting industries this paper investigates pollution haven hypothesis at domestic level in china using panel data of 30 provincial level regions for the period 2004 to 2013 this paper empirically examines to what extent multiple environmental policies affect intra country relocation of polluting industries in china it is found that the implementation of both economic policy instrument like pollution discharge fee and public participation like letter complaints on environmental problems encourages industrial relocation whereas the implementation of environmental legal policy instrument like laws regulations and rules prevents polluting industries from relocating to other regions it is also found that the relocation effect of environmental policies varies with industrial characteristics compared with water pollution intensive industry air pollution intensive industry dominated by stated owned capitals are insensitive to legal policy instruments these findings suggest that the validity of pollution haven hypothesis is jointly associated with the type of environmental policy as well as industrial characteristics

green goods are they good or bad news for the environment evidence from a laboratory experiment on impure public goods green goods such as recycled paper stationary or carbon neutral flights provide increasingly popular examples of impure public goods motivated by theoretical treatments of green goods as a bundle of private and public characteristics in proportions fixed by the provider we design an experiment with two linked treatments to test how the presence of impure public goods affects behaviour towards public good causes we set parameters such that from a standard economic perspective the presence of the impure public good is behaviourally irrelevant in a treatment where the impure public good provides only small contributions to the public good we observe that on aggregate pro social behaviour is lower in the presence of the impure public good on the contrary in the treatment where the impure public good is more generous towards the public good component at the expense of private earnings individuals are unaffected in their behaviour we observe that impure public goods that are theoretically irrelevant and are mostly self interested may hinder pro social behaviour and look for explanations in social psychology such as the phenomenon of thoughtful anchoring motivated reasoning and reluctant altruism the results from this experiment question the role of green goods in enhancing environmentally friendly behaviours

the environmental kuznets curve environmental protection policy and income distribution abstract the effect of economic growth on pollution emissions differs substantially among high income countries i address this issue by analyzing public environmental policy decisions individual heterogeneity relative income effect and the political framework in which policy decisions are taken determine the emergence of the downward sloping segment of the environmental kuznets curve ekc income inequality produces a gap between the country s ability to pay for environmental protection and a country s willingness to pay i test this result by using oecd data on public r d expenditure for environmental protection the conclusion is that contrary to the ek hypothesis moments of the income distribution function other than the mean may be important for the emergence of a virtuous path of sustainable growth in high income countries

corporate environmental responsiveness in india lessons from a developing country abstract we examine corporate environmental responsiveness in business organizations in india based on theoretically informed case analysis we operationalize corporate environmental responsiveness as a two order construct we find that level one the lower level responsiveness is driven by pressures arising out of powerful supply chain customers and institutional pressures resulting from internationalization the drivers for organizations at level two the higher level responsiveness are associated with organizational identities and cultures rooted in a long history of social responsiveness

the speculative attack on the peso and the real exchange rate argentina 1979 1981 abstract this article applies a speculative attack model to argentina during its pre announced exchange rate system from january 1 1979 to june 30 1981 the model attempts to verify a rule whereby if domestic credit growth exceeds the rate of currency depreciation two things occur first the domestic price of non traded goods rises relative to the price of traded goods second foreign reserves decline until a point when a sudden speculative attack depletes remaining reserves causes a precipitous fall in the relative price of non tradables and forces the country onto a floating exchange rate regime in some important respects the model captures the argentinian experience yet in other respects if fails to do so

prices or knowledge what drives demand for financial services in emerging markets this brief summarizes the results of a gender impact evaluation study entitled prices or knowledge what drives demand for financial services in emerging markets conducted in 2008 in indonesia the study observed that financial development is critical for growth but its micro determinants are not well understood financial literacy training has no impact on the probability of opening a bank account although it does have an impact among those with low levels of education and financial literacy a change from 3 to 14 led to a 7 6 percent increase in the probability of owning a bank account the results hold two years after a study funding for the study derived from world bank hbs division of research and faculty development

information disclosure policies evidence from the electricity industry i introduction developed nations environmental policies have evolved substantially in the past several decades early pollution control programs involved command and control approaches policies then frequently included pollution charges tradable permits and other market based instruments most recently a third wave of environmental policy has emerged that emphasizes information provision as an integral part of the risk mitigation strategy here government regulation is replaced or augmented by publicly provided information presumed to assist more cost effective private market and legal forces common examples include the toxics release inventory lead paint disclosures drinking water quality notices and eco labels the empirical effects of such programs however remain largely undetermined this paper examines the impact of a prominent mandatory disclosure program on the fuel mix percentages of large electric utility corporations the prominence of mandatory information policies is not restricted to environmental arenas for example developed countries equity markets generally require firm level financial information provision in many countries agricultural goods require country of origin and other health labels domestic colleges and universities are required by law to inform current and prospective students of crime statistics equity data and performance metrics even significant medical errors must now be disclosed to the community there are several potential advantages of information provision policies and theory suggests that disclosure programs may effectively achieve their goals healy and palepu 2001 provided a survey of the evidence in capital markets brouhle and khanna 2007 demonstrated that information provision can improve product quality in the environmental area kennedy laplante and maxwell 1994 arora and gangopadhyay 1995 maxwell lyon and hackett 2000 kirchhoff 2000 and khanna 2001 showed that the provision of information about pollution may correct a market failure improve performance and enhance welfare despite the literature s theoretical findings the empirical effects of disclosure programs remain inconclusive early studies of securities regulation found mixed results see stigler 1964 robbins and werner 1964 and benston 1973 a more recent literature suggested that disclosure programs in financial markets can achieve their desired effects la porta and lopez de silanes 2006 and greenstone oyer and vissing jorensen 2006 found that both market size and market returns were positively influenced by mandatory disclosure programs in product quality settings chipty and witte 1998 established that resource and referral agencies significantly influenced childcare prices but had no impact on the quality of care in contrast jin and leslie 2003 found that mandatory hygiene grade cards positively affected restaurant quality and health outcomes studies of environmental performance yielded similarly mixed results desvousges smith and rink 1992 found that information based programs influenced attitudes favorable to radon testing but testing itself only increased when mass media dissemination was coupled with community based implementation programs konar and cohen 1997 and khanna quimio and bojilova 1998 found that stock movements associated with toxics release inventory tri announcements led to increased abatement and reduced emissions however bui 2005 found that the declines in emissions after tri reporting events may have been attributable to regulation rather than investor pressure bennear and olmstead 2006 found that drinking water quality notices lowered violations for some systems but not others this paper is the first empirical economic study of the impacts of mandatory information provision in the electric utility industry the disclosure programs considered here differ significantly from the tri information programs examined previously

disclosure strategies for pollution control disclosure strategies which involve public and or private attempts to increase the availability of information on pollution form the basis for what some have called the third wave in pollution control policy after legal regulation the first wave and market based instruments the second wave while these strategies have become common in natural resource settings forest certification and organic farming for example they are less familiar in a pollution control context yet the number of applications in that context is now growing in both oecd and developing countries this survey will review what we know and don t know about the use of disclosure strategies to control pollution and conclude with the author s sense of where further research would be particularly helpful

optimal anti inflation programs in semi industrialized economies orthodox versus heterodox policies abstract the paper characterizes the optimal time consistent anti inflation program in a small open semi industrialized economy when policy makers choose the rate of exchange rate crawl the rate of change of fiscal spending and a wage and price control parameter to minimize deviations of output and inflation the optimal program involves a rapidly decelerating rate of crawl a sharp reduction in spending and a short initial period of wage and price controls the paper also assesses the importance of controls in helping to reduce the output loss associated with fighting inflation

stakeholder pressures as determinants of csr strategic choice why do firms choose symbolic versus substantive self regulatory codes of conduct to encourage corporations to contribute positively to the environment in which they operate voluntary self regulatory codes src have been enacted and refined over the past 15 years two of the most prominent are the united nations global compact and the global reporting initiative in this paper we explore the impact of different stakeholders pressures on the selection of strategic choices to join srcs our results show that corporations react differently to different sets of stakeholder pressures and that the src selection depends on the type and intensiveness of the stakeholder pressures as well as the resources at hand to respond to those pressures our contribution offers a more specific and finely variegated analysis of firm stakeholder interactions

confronting the environmental kuznets curve t he environmental kuznets curve posits an inverted u relationship between pollution and economic development kuznets s name was apparently attached to the curve by grossman and krueger 1993 who noted its resemblance to kuznets s inverted u relationship between income inequality and development in the first stage of industrialization pollution in the environmental kuznets curve world grows rapidly because people are more interested in jobs and income than clean air and water communities are too poor to pay for abatement and environmental regulation is correspondingly weak the balance shifts as income rises leading industrial sectors become cleaner people value the environment more highly and regulatory institutions become more effective along the curve pollution levels off in the middle income range and then falls toward pre industrial levels in wealthy societies the environmental kuznets curve model has elicited conflicting reactions from researchers and policymakers applied econometricians have generally accepted the basic tenets of the model and focused on measuring its parameters their regressions typically fitted to cross sectional observations across countries or regions suggest that air and water pollution increase with development until per capita income reaches a range of 5000 to 8000 when income rises beyond that level pollution starts to decline as shown in the conventional ekc line in figure 1 in developing countries some policymakers have interpreted such results as conveying a message about priorities grow first then clean up numerous critics have challenged the conventional environmental kuznets curve both as a representation of what actually happens in the development process and as a policy prescription some pessimistic critics argue that crosssectional evidence for the environmental kuznets curve is nothing more than a

the effects of education on financial outcomes evidence from kenya abstractwe study the effects of education on the financial outcomes of young people using kenya s introduction of free primary education fpe in 2003 as an exogenous shock to schooling our identi

informal sector pollution control what policy options do we have abstract in developing countries urban clusters of informal firms such as brick kilns and leather tanneries can create severe pollution problems these firms are however quite difficult to regulate for a variety of technical and political reasons drawing on the literature this paper first develops a list of feasible environmental management policies it then examines how these policies have fared in four independent efforts to control emissions from informal brick kilns in northern mexico the case studies suggest that a conventional command and control process standards are generally only enforceable when buttressed by peer monitoring b surprisingly clean technologies can be successfully diffused even when they raise variable costs in part because early adopters have an economic incentive to promote further adoption c boycotts of dirty goods sold in informal markets are unenforceable d well organized informal firms can block implementation of costly abatement strategies such as relocation and e private sector led initiatives may be best suited for informal sector pollution control

credence goods misleading labels and quality differentiation due to differences in information disclosure mechanisms consumer misinformation about the quality of many credence goods is more endemic at intermediate levels of the quality spectrum rather than at the extremes using an oligopoly model of vertical product differentiation we examine how consumers overestimation of the quality of intermediate quality products affects firms incentives to improve product quality the firms non cooperatively choose the quality of their product before choosing its price or quantity irrespective of the nature of second stage competition bertrand or cournot we find that quality overestimation by consumers increases profit of the intermediate quality firm and motivates it to raise its product s quality in response the high quality firm improves its product quality even further but ends up with lower profit overall average quality of the vertically differentiated product improves which raises consumer surplus social welfare increases when the firms compete in prices but falls when they compete in quantities

dynamic governance of clean energy markets how technical innovation could accelerate climate policies abstract this article explores the governmental means to accelerate technical progress in climate protection it is based on selected best practice cases in which the diffusion of low carbon technologies has been accelerated by ambitious policies the empirical cases involve not just renewable energies but also energy efficiency the latter being considered more difficult in terms of governance the examples are taken from advanced oecd countries as well as from emerging economies this article will explore which factors have caused this dynamic development the conclusion reached will show that the interaction of positive feedback mechanisms which has already been described as virtuous cycle provides only a plausible theoretical explanation if the policy cycle is added to the market cycle and the innovation cycle climate policy should not only define ambitious targets but also address all three feedback mechanisms

speculative currency attacks and balance of payments crises abstract this paper reviews the recent theoretical literature on collapsing exchange rate regimes using a combination of technique intuition and realworld observation we discuss the literature s main insights point out some unresolved questions and offer suggestions for future research the survey should be of interest to both specialists and non specialists in the field of international macroeconomics

analysis of the effectiveness of the first european pollutant emission register eper abstract the aim of this paper is to examine the effectiveness of the first european pollution emissions register eper a regulatory instrument based on the publication of the environmental performance of firms exceeding specified pollution limits the multivariate regression model mvrm is applied to capture the disciplinary effect of the eper so we first perform an analysis to determine whether the publication of the eper has a negative effect on the market value of the listed firms secondly we consider the possibility of the publication of the eper affecting the market value of firms which could be included in the eper but are not because their emissions do not exceed the specified pollution limits finally we prepare an index to compare the environmental results of the firms and analyse whether the consequences of publishing the eper are worse for firms with high relative pollution records

does environmental information disclosure benefit waste discharge reduction evidence from china as a tool for regulating the environment in china does environmental information disclosure reduce pollutant discharge to answer this question we empirically analyzed the emission data of the three wastes i e waste gas wastewater and solid waste in unit industrial gdp in 31 provincial units as a measure to reduce institutional emission environmental information disclosure only slightly influenced waste discharge reduction in the implementation period of the eleventh five year plan of china instead command control and market based tools significantly affected waste discharge reduction representative measures included penalties and charges with the continuously enhanced pressure of control environmental information disclosure facilitates the effects of command control tools on waste discharge reduction content analysis of environmental information disclosed by sample listed companies in jiangsu province was conducted the disclosure of insufficient environmental information on emission reduction can be attributed to adverse selection in system performance i e the selective disclosure trend considering greenwashing in the listed companies and to the limited quality of overall environmental information disclosure this study provides empirical evidence for chinese policy makers to improve the system for environmental information disclosure of listed companies

monitoring and enforcement is two tier regulation robust a case study of ankleshwar india abstract the regulation of industrial pollution is difficult in a rapidly industrialising low income setting this study looks at the efforts to regulate chemical plants in ankleshwar the largest chemical estate in asia pollution comes from many sources the distribution of information is highly asymmetric and the authorities have meagre resources the location of plants in an industrial estate does however provide interesting preconditions for a form of two tier regulation in which industry association becomes an intermediary between regulator and firms the association is better informed and has an incentive to regulate its members to maintain a good reputation but doesn t possess much formal authority and its voluntary monitoring and abatement program is akin to managing a common property resource the analysis of four preconditions for the success of such management suitable design principles effective monitoring objective implementation of rules and enforcement indicates that they are satisfied at least partially in ankleshwar

environment friendly behaviour and competitiveness a study of pulp and paper industry in india this paper seeks to examine the relationship between competitiveness and environment friendly behaviour of producers under an economic liberalisation regime for that purpose it employs a probit model and estimates the influence of the prime movers of industrial growth such as technical change and economies of scale on environmental degradation the empirical results of the study of pulp and paper industry identified as one of the most polluting industries in india indicate that these variables as the key players of competitiveness improvement have positive influence on environment friendly behaviour such findings therefore fail to provide support to a view that articulates ruthless exploitation of the environment under economic liberalisation programme

behavioral environmental economics promises and challenges environmental issues provide a rich ground for identifying the existence and consequences of human limitations in this paper we present a growing literature lying at the interface between behavioral and environmental economics this literature identifies alternative solutions to traditional economic instruments in environmental domains that often work imperfectly but it also faces a set of challenges including the difficulty of computing welfare effects and the identification of a robust environmental policy based on context dependent socio psychological effects we illustrate our critical discussion with two behavioral schemes that have been widely implemented green nudges and corporate environmental responsibility

information as regulation the effect of community right to know laws on toxic emissions abstract there is growing academic and policy level interest in the use of information as quasi regulatory mechanisms such as toxic release inventory tri and green labels mandatory disclosure requirements have been touted as market based incentives that may affect firm behavior we provide new evidence on the effectiveness of disclosure requirements by examining firm behavior in response to disclosures of tri emissions we find that firms with the largest stock price decline on the day this information became public subsequently reduced emissions more than their industry peers this is consistent with the view that financial markets may provide strong incentives for firms to change their environmental behavior

collapsing exchange rate regimes shocks and biases abstract patterns in domestic credit creation stemming from inconsistent fiscal policies have received widespread attention for their role in aggrevating speculative attacks on central bank foreign exchange reserves and contributing to the collapse of exchange rate regimes this paper acknowledges the importance of monetary and fiscal discipline but also emphasizes the importance of other random shocks to the domestic money market most notably shocks from external credit supplies and relative prices policies of the domestic fiscal authorities are only partial catalysts for speculative attacks on a currency expansion of domestic credit stemming from the monetization of fiscal imbalances may be dominated by involuntary domestic credit expansions which are necessitated by surprise shortages in supplies of external capital further the unexpected availability of external capital translates into a lower net critical reserve floor making the depletion of central bank reserves by a speculative attack more difficult to accomplish relative price shocks also randomize the demand for nominal money balances and therefore may also have a strong direct influence on the probability of an exchange regime collapse empirical studies of exchange rate crises that neglect these considerations will produce biased estimates of both expected collapse probabilities and anticipated post collapse exchange rates

education and saving the long term effects of high school financial curriculum mandates abstract over the last 40 years a majority of states have adopted consumer education policies and a sizable minority have mandated that high school students receive instruction on topics related to household financial decision making in this paper we attempt to determine whether these mandates have had any effect on subsequent decisions we exploit the variation in requirements both across states and over time to identify the effects of interest the evidence indicates that mandates have raised both exposure to financial curricula and subsequent asset accumulation once exposed students reached adulthood the estimated effects are gradual probably due to implementation lags

ghg registries participation and performance under the canadian voluntary climate challenge program between 1994 and 2004 the voluntary challenge and registry vcr played an important role in canadian climate change policy in this paper we examine the decision of firms to participate in the vcr the extent of their involvement and then ask if greenhouse gas emissions are related to past vcr participation as an information provision program we find evidence that firms may participate in vcr to signal their environmental responsibility to regulators and to some extent investors but not to consumers we also find that past involvement in the vcr is a strong and significant determinant of current involvement in the registry greenhouse gas emissions reported to the mandatory greenhouse gas reporting program in 2004 however do not appear to be different between vcr reporters and non reporters ghg emissions are observed to be significantly lower among firms that are smaller emit fewer toxic releases use more renewable energy sources are intermediate good producers and are located in quebec ontario and manitoba

a critical evaluation of exchange rate policy in turkey abstract this paper reviews and critically evaluates the exchange rate policy followed in turkey in the post 1980 period during which a far reaching program of liberalization has been launched we conclude that the new exchange rate policy has been essential for turkey s regaining its creditworthiness furthermore it has positively contributed to growth of output and exports and to expansion of tradables production relative to nontradables persistence of inflation and weakness of private investment in tradables overshadow the successes recorded in other areas and cast doubt over the sustainability of turkey s outward orientation we argue that the root cause of these problems has been inconsistencies between overall economic policies rather than the exchange rate policy itself we compare the period of real appreciations since late 1998 with the earlier period of real depreciations and draw policy implications

currency crashes in emerging markets an empirical treatment we use a panel of annual data for over 100 developing countries from 1971 through 1992 to characterize currency crashes we define a currency crash as a large change of the nominal exchange rate that is also a substantial increase in the rate of change of nominal depreciation we examine the composition of the debt as well as its level and a variety of other macroeconomic factors external and foreign crashes tend to occur when output growth is low the growth of domestic credit is high and the level of foreign interest rates are high a low ratio of fdi to debt is consistently associated with a high likelihood of a crash

economic prescriptions for environmental problems how the patient followed the doctor s orders o ne of the dangers with ivory tower theorizing is that it is easy to lose sight of the actual set of problems which need to be solved and the range of potential solutions as one who frequently engages in this exercise i can attest to this fact in my view this loss of sight has become increasingly evident in the theoretical structure underlying environmental economics which often emphasizes elegance at the expense of realism in this paper i will argue that both normative and positive theorizing could greatly benefit from a careful examination of the results of recent innovative approaches to environmental management the particular set of policies examined here involves two tools which have received widespread support from the economics community marketable permits and emission charges pigou 1932 dales 1968 kneese and schultze 1975 both tools represent ways to induce businesses to search for lower cost methods of achieving environmental standards they stand in stark contrast to the predominant command and control approach in which a regulator specifies the technology a firm must use to comply with regulations under highly restrictive conditions it can be shown that both of the economic approaches share the desirable feature that any gains in environmental quality will be obtained at the lowest possible cost baumol and oates 1975 until the 1960s these tools only existed on blackboards and in academic journals as products of the fertile imaginations of academics however some countries have recently begun to explore using these tools as part of a broader strategy for managing environmental problems

the economic importance of financial literacy theory and evidence this paper undertakes an assessment of a rapidly growing body of economic research on financial literacy we start with an overview of theoretical research which casts financial knowledge as a form of investment in human capital endogenizing financial knowledge has important implications for welfare as well as policies intended to enhance levels of financial knowledge in the larger population next we draw on recent surveys to establish how much or how little people know and identify the least financially savvy population subgroups this is followed by an examination of the impact of financial literacy on economic decision making in the united states and elsewhere while the literature is still young conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps a final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy jel a20 d14 g11 i20 j26

which firms are more sensitive to public disclosure schemes for pollution control evidence from indonesia s proper program this paper analyzes differences in firms responsiveness to proper indonesia s public disclosure program for industrial pollution control the overall effectiveness of this program at achieving emissions reductions and its low regulatory costs have earned it a good reputation around the world proper had no deterrents or incentives other than those that arose indirectly from publicly disclosing information about the environmental performances of firms we analyzed plant level data to relate short and longer term environmental responses to facility characteristics the results revealed that foreign owned firms were consistently more likely to respond to the environmental rating scheme compared to private domestic firms this is a clear and important insight with consequences for a number of issues such as understanding the pollution haven debate also firms located in densely populated regions particularly in java responded more positively to the public disclosure of proper ratings the main observed effect was however given by the initial level of environmental performance of firms those firms that had bad environmental performance records felt pressure to improve but if the initial abatement steps had already been taken the incentives to improve further appeared to diminish

determinants of pollution abatement in developing countries evidence from south and southeast asia abstract developing countries pa ticularly those in asia are fast adopting industrial pollution control standards similar to those in developed countries formal regulation has been greatly hampered however by the absence of clear and legally binding regulations limited institutional capacity lack of appropriate equipment and trained personnel and inadequate information on emissions one would predict highly pollution intensive production under such conditions our research however has uncovered strongly contradictory evidence despite weak or nonexistent formal regulation there are many clean plants in the developing countries of south and southeast asia of course there are also many plants which are among the world s most serious polluters what explains such extreme interplant variation this paper reviews evidence drawn from three empirical studies of plant level abatement practices conducted 1992 1994 the analyses test the importance of plant characteristics economic considerations and external pressure in determining environmental performance the results consistently show that pollution intensity is negatively associated with scale productive efficiency and the use of new process technology it is strongly and positively associated with public ownership but foreign ownership has no significant effect once other plant characteristics are taken into account among external sources of pressure community action or informal regulation emerges as a clear source of interplant differences in all three studies the results suggest that local income and education are powerful predictors of the effectiveness of informal regulation they also show that existing formal regulation has measurably beneficial effects even when it is quite weakly developed

credence goods efficient labelling policies and regulatory enforcement we analyse the optimality of information revelation of hidden attributes of credence goods via alternative labelling procedures when consumers are heterogeneous in their willingness to pay for the hidden attribute producers can either self label their products or have them certified by a third party the government can impose self or third party labelling requirements on either the green or the brown producers our benchmark model develops a condition that links the optimal imposition of third party labelling to the relative market share of each type of the good under complete information we extend our analysis to incorporate asymmetric information and cheating by the producers when corrupt producers can affix spurious labels the government needs to supplement the labelling policy with costly monitoring activities we find that mandatory self labelling schemes generally dominate mandatory third party labelling unless the market share effect greatly exceeds the incentive to cheat effect

transparency and value chain sustainability the rise of transparency on the public and political agendas is not an accident or fad soon to be replaced by another timely topic in sustainability politics and governance transparency will remain a key topic in global value chains and will further develop as it piggy backs on wider social developments such as globalization the information age and the shifting role of states in environmental governance transparency in value chains is bound up with positive connotations the more transparency the better it is for the sustainability of chains and for the empowerment of consumers and civil society but an overall positive past assessment of value chain transparency does not automatically extend into the future as new challenges lie ahead this paper investigates the new challenges for value chain transparency and their consequences due to the growing importance attached to transparency in value chains it becomes a central object of power struggles with uncertain outcomes markets and states seek to capture transparency arrangements for their own goals which may not be in line with the assumed normative linkages between value chain transparency and increased power for consumers and civil society in that sense transparency is losing its innocence more transparency is no longer always the best for citizen consumer empowerment and for the sustainability of value chains but value chain secrecy is not an attractive alternative this opens a new research agenda on how transparency should be organized and arranged in value chains to live up to the promises of democracy and sustainability

the impact of environmental management on firm performance environmental management has the potential to play a pivotal role in the financial performance of the firm many individuals suggest that profitability is hurt by the higher production costs of environmental management initiatives while others cite anecdotal evidence of increased profitability a theoretical model is proposed that links strong environmental management to improved perceived future financial performance as measured by stock market performance the linkage to firm performance is tested empirically using financial event methodology and archival data of firm level environmental and financial performance significant positive returns were measured for strong environmental management as indicated by environmental performance awards and significant negative returns were measured for weak environmental management as indicated by environmental crises the implicit financial market valuation of these events also was estimated cross sectional analysis of the environmental award events revealed differences for first time awards and between industries first time award announcements were associated with greater increases in market valuation although smaller increases were observed for firms in environmentally dirty industries possibly indicative of market skepticism this linkage between environmental management and financial performance can be used by both researchers and practitioners as one measure of the benefits experienced by industry leaders and as one criterion against which to measure investment alternatives

different types of environmental regulations and heterogeneous influence on green productivity evidence from china this paper attempts to examine if the strong version of porter hypothesis is supported in china by investigating how different regulatory instruments and the relative stringency impact green productivity we use a slacks based measure sbm and luenberger productivity index accounting for undesirable outputs to evaluate the industrial green productivity growth rates of china s 30 provinces the estimates imply an unsustainable development model in china with significant regional differences by employing a panel threshold model and a province level panel dataset during 2000 2012 empirical results show that both command and control and market based regulation have a non linear relationship with and can be positively related to green productivity but with different constrains on regulation stringency there are double thresholds with the command and control and exists an optimal range of stringency for productivity improvement while a single threshold has been found with the market based regulation and its current stringency is reasonable for most of provinces moreover based on china s reality the productivity effect driven by market based regulation is much stronger than that of the command and control the mechanism of informal regulation is much more complicated consequently we find evidence to support the strong porter hypothesis that reasonable stringency of environmental regulations may enhance rather than lower industrial competitiveness

the use of the exchange rate for stabilization a real interest arbitrage model applied to argentina we model interest rate and portfolio determination under the risk of real currency devaluation taking into account risk aversion on the part of investors a simple extension of the friedman savage analysis of consumer behavior under uncertainty to a two period two country setting allows us to explicitly solve for the interest rate premium paid in the risky asset the model is applied to the 1979 1980 argentinean experiment with the pre announced exchange rate empirical results suggest that a safety factor central bank reserves as a fraction of m2 is closely related to the net ex ante and ex post arbitrage differentials in favor of argentina relative to the united states jel d8

the minimal impact of a large scale financial education program in mexico city abstract we conduct randomized experiments around a large scale financial literacy course in mexico city to understand the reasons for low take up among a general population and to measure the impact of this financial education course our results suggest that reputational logistical and specific forms of behavioral constraints are not the main reasons for limited participation and that people do respond to higher benefits from attending in the form of monetary incentives attending training results in a 9 percentage point increase in financial knowledge and a 9 percentage point increase in some self reported measures of saving but in no impact on borrowing behavior administrative data suggests that any savings impact may be short lived our findings indicate that this course which has served over 300 000 people and has expanded throughout latin america has minimal impact on marginal participants and that people are likely making optimal choices not to attend this financial education course

the economics of eco labeling standards costs and prices abstract the existing eco label landscape is fragmented because of the presence of numerous labels with different standards and is a pre competitive environment for firms to play in with many unanswered questions different standards eco labels are built around have different effects on credibility and legitimacy costs and benefits and ability to achieve sustainability goals of eco labeling focusing on eco label standards and using a hotelling type horizontal differentiation model we identify standards specific issues for and characterize primary barriers to eco labeling some of the major findings are as follows 1 more rigorous environmental standards enforced by higher integrity labels do not necessarily translate into higher selling prices 2 higher prices commanded by labeled products do not guarantee that a firm will derive higher profits from eco labeling 3 auditing fees paid per product unit being inspected for ensuring compliance with an eco label standard rather than participation fees paid up front is the primary de facto barrier to business involvement in eco labeling and 4 customers willingness to pay price premiums for eco labeled products is not a sufficient condition to generate a premium in the market

africa s education enigma the nigerian story abstract in the last two decades the social and economic benefits of formal education in sub saharan africa have been debated anecdotal evidence points to low returns to education in africa unfortunately there is limited econometric evidence to support these claims at the micro level in this study i focus on nigeria a country that holds 1 5 of africa s population i use instruments based on the exogenous timing of the implementation and withdrawal of free primary education across regions in this country to consistently estimate the returns to education in the late 1990s the results show the average returns to education are particularly low in the 90s in contrast to conventional wisdom for developing countries 2 8 for every extra year of schooling between 1997 and 1999 surprisingly i find no significant differences between ols and iv estimates of returns to education when necessary controls are included in the wage equation the low returns to education results shed new light on both the changes in demand for education in nigeria and the increased emigration rates from african countries that characterized the 90s

public disclosure programs vs traditional approaches for environmental regulation green goodwill and the policies of the firm abstract a public disclosure program pdp is compared to a traditional environmental regulation exemplified by a tax subsidy in a simple dynamic framework a pdp aims at revealing the environmental record of firms to the public this information affects its image goodwill or brand equity and ultimately its profit a firm polluting less than its prescribed target would win consumer s sympathy and raise its goodwill whereas it is the other way around when the firm exceeds its emissions quota the evolution of this goodwill is assumed to depend also on green activities or advertising expenditures within this framework we analyze how a pdp affects the firm s optimal policies regarding emissions pricing and advertising as compared to a traditional regulation we show that advertising acts as a complementary device to pricing and that emissions are increasing in goodwill the role of a standard or target level for emissions turns out to be totally different under both policy regimes in the case of a tax subsidy approach this target level only acts as constant who increases or decreases profit by a fixed amount but it does not affect the policy of the firm on the contrary if a pdp is implemented the target value for emissions enters in an important way in the goodwill accumulation mechanism and determines how the firm reacts to the regulation and what is the time path for the economic and environmental variables moreover this value is also crucial to determine the possibility that a pdp is profit improving a policy implication of this fact is that regulators should be particularly careful in fixing the emission standard when a pdp is applied the theoretical results are complemented with a numerical illustration

functional mechanisms of mandatory corporate environmental disclosure an empirical study in china abstract this paper analyzes the functions of a government oriented disclosure program in china which rates company environmental performance into five colors and discloses the results to the public the rating results and their annual changes during 2005 2007 are statistically summarized by using the detailed database provided by municipal environmental protection bureau of the study area changshu city in jiangsu province the reflexive deterrent and enhancement mechanisms preliminarily identified for the disclosure program are qualitatively evaluated by using the information collected by onsite interviews to 32 program participating firms in overall the firms environmental performances have been improved the companies with worse rating records would be more likely to improve their environmental performances in the following years the disclosure program encourages the firms to be more reflexive to their internal environmental problems the deterrent and enhancement functions of the program are weak due to the marginal pressure from the classified stakeholders such as investors business partners and creditors the influence of the public such as neighboring communities and environmental ngos is weak too encouraging serious reactions of firm s stakeholders to the disclosed rating results should be addressed in order to enhance the effectiveness of the disclosure strategy

monitoring and enforcement of environmental regulations lessons from a natural field experiment in norway abstract relying on a small natural field experiment conducted by the norwegian environmental protection agency i estimate effects of three fundamental elements of most monitoring and enforcement practices self reporting audit frequency and specific deterrence i find evidence of under reporting of violations in firms self audits as more violations are detected in on site audits than in self audits announcing the increased audit frequency has no effect on firms compliance but an audit raises subsequent compliance substantially

assessing the impact of formal and informal regulations on environmental and economic performance of brazilian manufacturing firms this study investigates the impact of formal and informal regulations on environmental and economic performance of brazilian manufacturing firms we adopt a dual approach where production technology is represented by a cost function approximated by a translog form pollution is considered as a negative by product that can be modified trough using either formal regulation inspections or sanctions or informal regulation community pressure a simultaneous equation model is estimated by three stage least squares on a sample of 404 industrial establishments located in the state of sao paulo brazil we show that pollution abatement costs for the brazilian manufacturing sector are different from zero which suggests that pollution emissions are affected by environmental regulation we also demonstrate that environmental performance of firms is jointly affected by formal and informal regulation lastly formal regulation is largely influenced by informal regulation and more specifically by community pressure

financial policy and speculative runs with a crawling peg argentina 1979 1981 abstract in this paper we present a model of a balance of payments crisis and examine the argentine experiment with a crawling peg between december 1978 and february 1981 the approach taken allows us to examine the evolution of a crisis when a collapse is not perfectly foreseen and yields plausible estimates of one month ahead probabilities of a collapse of the crawling peg the results suggest that the viability of an exchange rate regime depends on the consistency of exchange rate policy with domestic credit policy if the two are not consistent confidence in exchange rate policy is undermined

environmental auditing in management systems and public policy abstract new international standards for environmental auditing are now being actively promoted by public authorities and adopted by private firms one important feature of these standards is their emphasis on managerial systems and incentives that support a wiser use of environmental resources this paper studies such a system in which incentive compensation may be based in part on the results of an environmental audit it is found that optimal wages after an environmental audit is performed should have a greater range than wages paid when no audit has occurred it is also shown that the decision to conduct an environmental audit and the size of the expected wage in this case depend crucially on whether the agent s prudence or precautionary motives dominates his aversion to risk it is finally found that the insertion of environmental audits within current management systems would certainly induce a manager to care more about the environment although this may come at the expense of less concern for other activities we find plausible circumstances in which properly designed environmental audits overcome such a tradeoff and increase the manager s attention tobothenvironmental and traditional tasks some implications of the analysis for environmental public policy are also discussed briefly

eco labeling and market equilibria with noisy certification tests an intriguing alternative to traditional methods for regulating externalities is the provision of information about firms environmental attributes an increasingly important example of this approach is eco labeling where a third party certifies firms products such schemes are currently used in a variety of countries this paper investigates the equilibria that may occur with eco labeling and the attendant welfare effects i model certification as a noisy test subject to both type i and type ii errors but where green firms more likely to pass than brown firms while it commonly leads to an increase in the fraction of green units in the market the introduction of an eco label can either increase or decrease welfare

private enforcement of federal environmental law while the role of nongovernmental organizations in environmental policy is growing rapidly our analytical understanding of the causes and consequences of this emerging role has not kept pace in the 1970s congress authorized private organizations to seek injunctions and in some cases penalties against firms violating the terms of their environmental operating permits the economic models in this paper show how the varying remedies limitations and reimbursement procedures can affect both the level and patterns of litigation activity as well as the compliance consequences a database containing information on 1 205 cases is used to infuse empirical content into the analysis

informal regulation of pollution in a developing country evidence from india abstract recent policy discussions recognise the limitations of formal regulations to stem pollution in developing countries as a result there is a growing interest in the potential of informal regulations to achieve environmental goals in india many polluting industries fall under the rubric of the unorganised sector in such a context localised pollution may be influenced by discussions and reports on pollution in the vernacular press this study attempts to test the hypothesis that the press can act as an informal agent of pollution control this hypothesis is tested using monthly water pollution data from four hot spots in the state of gujarat india for the period 1996 to 2000 the results show that the press can function as an informal regulator if there is sustained interest in news about pollution however not all pollution agents are affected by pollution news press coverage appears to mainly influence industrial estates with a mix of small medium and large industries

protecting the environment when costs and benefits are privately known in this survey i analyze different approaches for protecting the environment when stakeholders are privately informed about the costs and benefits of pollution reduction the presence of asymmetric information calls for some important departures from the textbook prescriptions of marketable permits and emission taxes for controlling pollution for instance it may no longer be optimal to equate the social marginal benefits to the marginal cost of cleanup in determining appropriate abatement levels i conclude this review with some suggestions for future research in this area

collapsing exchange rate regimes some linear examples abstract we construct a pair of linear examples to study the collapse time of a fixed exchange rate regime the first example is a perfect foresight continuous time model which allows calculation of the exact collapse time and the tracking of reserves the second example is a discrete time stochastic model which yields an endogenous probability distribution over the collapse time and produces a forward discount of the exchange rate

the exact timing of the collapse of an exchange rate regime and its impact on the relative price of traded goods as of february 28 1983 ninety four countries are classified as having a fixed exchange rate regime 38 are pegged to the u s dollar 13 to the french franc 14 to the special drawing right and 24 to different baskets of currencies the choice of a fixed exchange rate peg implies a specific monetary discipline namely monetary growth equal to the growth rate of the currency or currencies to which a country is pegged monetary policy is thus subject to an exchange rate rule rather than to either a monetary growth rule or alternatively to discretionary policy a fixed exchange rate is a specific case of an active crawling peg where the preannounced rate of change in the exchange rate is zero active crawling peg rules whereby the exchange rate is adjusted downward by a preannounced amount over a specified period of time have been practiced in various places particularly in latin america recent experiments include argentina beginning december 1978 brazil during the 1980 calendar year chile from february 1978 to june 1979 jamaica from may 1978 to may 1979 portugal from august 1977 to june 1979 and uruguay beginning october 1978 1 at times the prean

mobile phones and economic development in rural peru the authors estimate the effects of mobile phone coverage on different measures of economic development the authors exploit the timing of mobile coverage at the village level merging it with a village level panel dataset for rural peru the main findings suggest that mobile phone expansion has increased household real consumption by 11 percent reduced poverty incidence by 8 percentage points and decreased extreme poverty by 5 4 percentage points moreover those benefits appear to be shared by all covered households regardless of mobile ownership

schooling and labor market consequences of school construction in indonesia evidence from an unusual policy experiment between 1973 and 1978 the indonesian government engaged in one of the largest school construction programs on record combining differences across regions in the number of schools constructed with differences across cohorts induced by the timing of the program suggests that each primary school constructed per 1 000 children led to an average increase of 0 12 to 0 19 years of education as well as a 1 5 to 2 7 percent increase in wages this implies estimates of economic returns to education ranging from 6 8 to 10 6 percent

voluntary disclosure and investment in environmental technology abstract i examine the role of voluntary disclosure programs in creating market incentives for competing firms to invest in environmentally cleaner technology in an industry subject to environmental regulation such as emission taxes such programs may allow firms to credibly disclose their progress in achieving compliance cost reduction through investments in internal rd the outcome of the investment is private information i show that the ex ante incentive to invest is always higher in the presence of the voluntary disclosure program than without it in particular the opportunity to credibly disclose progress in cost reduction allows a successful firm to convey its true position of competitive advantage to the rival firm and realize higher market share and profit thus voluntary disclosure programs increase the efficacy of traditional forms of environmental regulation in creating incentives for green technological change even when buyers have no preference for greener technology i show that such programs generally increase social welfare

formal and informal regulation of industrial pollution comparative evidence from indonesia and the united states the authors start from the premise that governments act as agents of the public in regulating pollution using the instruments at their disposal but when formal regulatory mechanisms are absent or ineffective communities will seek other means of translating their preferences into reality recent empirical work suggests the widespread existence of such informal regulation communities are often able to negotiate with or otherwise informally pressure polluting plants in their vicinity to clean up their thesis is that such informal regulation is likely wherever formal regulation leaves a gap between actual and locally preferred environmental quality they use plant level data from indonesia and the united states two countries that are very different both socio economically and in terms of pollution regulation to test a model of equilibrium pollution under informal regulation their results suggest three common elements across countries and pollutants abatement is generally subject to significant scale economies within country variations in labor and energy prices have little impact on pollution intensity community incomes have a powerful negative association with pollution intensity their findings on community income are especially important as they suggest a powerful role for informal regulation whether or not formal regulation is in place the impact of income disparity on inter county differences in u s pollution intensities seems to match the impact in indonesia undoubtedly this reflects differences in both preference for environmental quality and ability to bring pressure on polluting factories the fact that such disparities exist in the united states even for traditionally regulated pollutants shows that u s regulation has not been able to ensure uniform environmental quality for all citizens regardless of income class

community pressure for green behavior the desire to avoid rousing community hostility may encourage firms to behave in an environmentally responsible manner firms may engage in corporate social responsibility csr to maintain community support and or to regain the support of a community where it has been lost it has been conjectured that such informal regulation could effectively replace formal intervention in some settings and usefully complement it in others we explore these conjectures with mixed results informal regulation is necessarily less efficient than a well designed formal alternative and the pattern of green behavior induced by the threat of community hostility may increase or decrease welfare the existence of community pressure may increase or decrease the optimal calibration of a formal intervention in this case an environmental tax and may complement or detract from the incentives generated by an optimally calibrated tax

strategic environmental disclosure evidence from the doe s voluntary greenhouse gas registry abstract although mandatory disclosure programs have been studied extensively strategic voluntary environmental disclosures by firms are not well understood we study the motivations for and impacts of firms strategic disclosure of greenhouse gas reductions to the us government we first model firms joint abatement and disclosure decisions incorporating both economic and political incentives we then use data from the department of energy s voluntary greenhouse gas registry to compare reported reductions to actual emissions we find that participants in the program engage in highly selective reporting in the aggregate they increase emissions over time but report reductions in contrast non participants decrease emissions over time participants tend to be large firms facing strong regulatory pressure pressure from environmental groups reduces the likelihood of participation suggesting such groups viewed the program as a form of greenwash participating in the 1605 b program had no significant effect on a firm s changes in carbon intensity over time

community pressure and clean technology in the informal sector an econometric analysis of the adoption of propane by traditional mexican brickmakers abstract in many developing countries the informal sector comprised of low technology unlicensed micro enterprises is a major source of pollution environmental management in this sector is exceptionally challenging though clean technologies offer a means of mitigating the problem to our knowledge there has been no rigorous empirical research on why informal or even small scale firms do and do not adopt them as a first step toward filling this gap this paper presents the results of an econometric analysis of the diffusion of propane among informal traditional brickmakers in cd juarez mexico a leading source of air pollution owing to their reliance on cheap highly polluting fuels such as used tires and scrap wood the two key policy implications of our analysis are that 1 it is possible to successfully promote the adoption of a clean technology by intensely competitive informal firms even when the new technology significantly raises variable costs and 2 community pressure applied by competing firms and private sector local organizations can generate incentives for adoption

risk sharing and transactions costs evidence from kenya s mobile money revolution we explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption in our panel sample adoption of the innovation increased from 43 to 70 percent we find that while shocks reduce consumption by 7 percent for nonusers the consumption of user households is unaffected the mechanisms underlying these consumption effects are increases in remittances received and the diversity of senders we report robustness checks supporting these results and use the four fold expansion of the mobile money agent network as a source of exogenous variation in access to the innovation jel e42 g22 o16 o17 z13 in developing countries informal networks provide an important means by which individuals and households share risk though the insurance they provide is often incomplete economists have proposed a number of reasons for this incompleteness including information asymmetries which manifest in problems of moral hazard and limited commitment both of which induce positive correlations between realized income and consumption in this article we emphasize a complementary source of incompleteness transaction costs literally the costs of transferring resources between individuals we test the impact of transaction costs on risk sharing by analyzing data from a large panel household survey that we designed and administered in kenya over a three year period to capture the expansion of mobile money this financial innovation has allowed individuals to transfer purchasing power by simple short messaging service sms technology and has dramatically reduced the cost of sending money across large distances mobile money is a recent innovation in developing economies one of the first and most successful examples to date is kenya s m pesa 1 in just four years after its

non mandatory approaches to environmental protection the approach to environmental protection has been evolving from a regulation driven adversarial government push approach to a more proactive approach involving voluntary and often business led initiatives to self regulate their environmental performance this has been accompanied by increasing provision of environmental information about firms and products to enlist market forces and communities in creating a demand for corporate environmental self regulation by signaling their preferences for environmentally friendly firms this paper provides an overview of the non mandatory approaches being used for environmental protection and surveys the existing theoretical literature analyzing the economic efficiency of such approaches relative to mandatory approaches it also discusses empirical findings on the factors motivating self regulation by firms and its implications for their economic and environmental performance it examines the existing evidence on the extent to which information disclosure is effective in generating pressures from investors and communities on firms to improve their environmental performance