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Impact on Asian Firms of Product-related Environmental Regulations through Global Supply Chains: A Study of Firms in Malaysia

Discussion Papers

No.453

by Etsuyo Michida, Yasushi Ueki and Kaoru Nabeshima
March 2014

ABSTRACT

This paper sheds light on the important role played by global supply chains in the adaptation to product-related environmental regulations imposed by importing countries, with a focus on chemicals management. By utilizing a unique data collected in Penang, Malaysia, we depict the supply chain structures and how differences among firms in participation to global supply chain link to differences in chemical management. We found that firms belonging to a supply chain are in a better position to comply with these regulations because information and requirements are transmitted through global supply chains. In contrast, those firms that are neither exporters nor a part of a global supply chain lack the knowledge and information channels relevant to chemical management in a product.

Keywords: global supply chain, FDI, product-related environmental regulation, REACH, RoHS
JEL classification: F18, O14

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