The Effect of EU Environmental Regulation on International Trade: Restriction of Hazardous Substances as a Trade Barrier
by HONDA Keiichiro
In 2003 the Restriction of Hazardous Substances (RoHS) was established in the EU, which limited the trade of machinery, electrical and electronic equipment that have at least one of the substances considered hazardous under RoHS directive. Since countries trading with the EU must comply with this new regulation, it is expected a decrease in value of imports to the EU. In this paper, it is followed the procedures used in Heckman (1979), as well as the extended procedure suggested by Helpman, Melitz, and Rubinstein (2008) to ascertain the effects on the persistence of trade and values of trade.
Keywords: the RoHS directive, harmonized standards, gravity model, intensive and extensive margin, sample selection and firm heterogeneity
JEL classification: F13, F18, Q56
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