Stricter environmental regulations boost international competitiveness in manufacturing sectors.
The study looked at how strict environmental rules affect trade and production in polluting industries. They found that tougher regulations reduce the export and production of the most polluting goods, supporting the pollution haven effect. However, stricter rules don't necessarily lead to less production overall. In fact, countries with better environmental technology can still be competitive in polluting industries. This means that countries can control pollution and be competitive internationally without sacrificing one for the other.