Do Dirty Industries Conduct Offshore Assembly In Developing Countries?
Author InfoDon P. Clark SERAFINO MARCHESE SIMONETTA ZARRILLI Abstract This paper investigates whether the cost of environmental regulation influences the international location of polluting industries. Industries that operate production facilities in developing countries are identified through their use of the offshore assembly provisions in the U.S. tariff code. Pollution intensity of industry output is found to significantly reduce the probability of conducting offshore assembly in developing countries. This finding contradicts the argument that developing countries are becoming pollution havens as a result of offshore assembly independent of their general disregard for the environment. Integrating production across national boundaries might actually enhance worldwide environmental quality. Relatively clean stages of the production process are being transferred to developing countries with lax environmental regulations, while polluting segments remain in the U.S. where strict environ
