Journal of International Business and Economy

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Domestic Industrial Environmental Cost and Strategic Choice in Developing Countries
Dechun Huang, Zhibiao Liu, Andrew F. Thompson, and Jie Chen
Volume 8, Number 2, Fall 2007, pp. 49~67

This paper examines competitive issues related to environmental policies like the European Union directives on Waste Electrical and Electronic Equipment and Restriction on Hazardous Substances implemented in 2006. In order to examine strategic environmental choice implications related to these directives, a vertical market model developed by Stephen F. Hamilton in analyzing competitive choice amongst domestic and foreign, downstream and upstream companies in the presence of environmental constraints was adopted. The main conclusion is that industrial and environmental policies in developing countries should be refocused so as to realize the integration of the environmental cost by internalizing the externalities.

Keywords: industrial chain, vertical contracts, industrial environmental trade policy, cost domestic, Pigouvian taxes

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