EFFECT OF ENVIRONMENTAL REGULATIONS ON STATE- LEVEL MANUFACTURING CAPITAL FORMATION*

ABSTRACT We quantify the effect of environmental regulations on regional capital formation in the manufacturing sector. Our model integrates environmental regulations into a choice-theoretic model derived from Tobin's q theory of investment. It is postulated that more stringent environmental regulations raise the firm's cost of production both directly and indirectly, thus reducing the firm's q value and lowering the rate of capital formation. The empirical results indicate that the effect of environmental regulations on net capital formation is modest. We do find that environmental regulations affect regions differently. More stringent environmental regulations will improve the relative position of manufacturers in the North-east, South Atlantic and West. Over one-fourth of the dollar losses in manufacturing capacity would occur in five states: Texas, California, Pennsylvania, Ohio and Michigan.     

The Impossible Trinity: Inflation Targeting,Exchange Rate Management and Open Capital Accounts in Emerging Economies

This article contributes to the debate on macroeconomic management and capital account regulations in developing and emerging countries (DECs). It argues that the recommendation by neoclassical economists and international financial institutions (IFIs) to combine an inflation‐targeting regime with exchange rate management, whilst maintaining open capital accounts, is not only impossible but also potentially counterproductive. The article draws on extensive semi‐structured interviews with currency traders in Brazil and London to show that this is due to the particular way such a regime shapes central bank interventions in the money and foreign exchange markets and the destabilizing way these interventions interact with financial market expectations. The interview results also demonstrate that the guidelines issued by IFIs actually undermine, rather than aid, DEC central banks’ initial attempts to manage excessive exchange rate movements. These results support the long‐standing argument by heterodox economists and critical international political economists that DECs need to make the exchange rate an explicit instrument and goal of their macroeconomic policy and complement it with comprehensive capital account regulations to reduce the destabilizing impact of international capital flows. The interview results also give some concrete suggestions on how to achieve this.     

Environmental Values and Water Policy

The emergence of water markets has heralded the prospect of increased efficiency in the use of the resource for extractive purposes. However, water markets have not encompassed all elements of demand for the resource. Notably, demands for the environmental public goods provided by river flows have not been revealed in markets. State Governments have instituted regulations requiring ‘environmental flows’ to be quarantined from the market allocation process. This policy has triggered negative responses from irrigators and conservationists. Lobby groups have found that the process of determining environmental flows is a prospective site for rent seeking. To avoid policy being driven by rent seeking, information on the costs and benefits of environmental flows is useful. Whereas the costs of environmental flows are readily assessed through reference to market data on irrigators’ surpluses foregone, the benefits must be estimated through the use of non‐market, stated preference valuation techniques. These techniques — including contingent valuation and choice modelling — remain controversial. Some argue that they should not be used on ethical grounds. Others argue that they cannot be used on technical grounds. These arguments are discussed in this paper, using the context of the water policy debate. The evidence is that stated preference techniques are being used, and applications have been performed in Australia in the context of riverine health. However their use remains restricted relative to the scale of the Australian natural resource management task. Some possible explanations for this limited up‐take are provided along with some suggested ways forward.     

Selective border permeability: Governing complex environmental issues through and beyond COVID-19

COVID-19 has changed the permeability of borders in transboundary environmental governance regimes. While borders have always been selectively permeable, the pandemic has reconfigured the nature of cross-border flows of people, natural resources, finances and technologies. This has altered the availability of spaces for enacting sustainability initiatives within and between countries. In Southeast Asia, national governments and businesses seeking to expedite economic recovery from the pandemic-induced recession have selectively re-opened borders by accelerating production and revitalizing agro-export growth. Widening regional inequities have also contributed to increased cross-border flows of illicit commodities, such as trafficked wildlife. At the same time, border restrictions under the exigencies of controlling the pandemic have led to a rolling back and scaling down of transboundary environmental agreements, regulations and programs, with important implications for environmental democracy, socio-ecological justice and sustainability. Drawing on evidence from Southeast Asia, the article assesses the policy challenges and opportunities posed by the shifting permeability of borders for organising and operationalising environmental activities at different scales of transboundary governance.     

Rent,Real Estate,and Flood Mitigation in New Orleans East

This paper presents results from a study of environmental harm created in the collision of real estate speculation and the political process that governed extension of the urban frontier of New Orleans into its eastern wetlands. Near term concerns of rent‐seeking real estate capital and the contested politics of urban infrastructure expansion challenged a fragmented state charged with regulatory oversight and protection of investments in land and citizens. The paper engages theoretically the relative inattention of urban political ecology theory to rent as a way to theorize how capital flows through land, and argues for increased attention to the problem of land rent and the multiple scales of political engagement that manage ecological crisis immanent in the metabolism of nature and society under capitalism.     

外资流动的动力学研究——以广东省为例

资本流动受推力、引力和阻力作用,在空间上先向中心城市和交通干线集聚,然后沿城市体系和交通干线作"蛙跳"式、点线式推进,最后向乡村面状扩散。资本流动对流入地区产生正负两方面的影响。投资环境建设和引资工作应针对不同阶段资本流动的特点和驱动因素,采取相应的政策,调控外资流动,减少负面影响,使利用结构合理化。     

Energy and Environmental Politics in Post-Corporatist Mexico

No government that is serious about environmental protection will imitate the Mexican model. The undrinkable waters and defiled deserts of Mexico's northern border towns and the poisoned air of its capital city are infamous. But there are noticeable changes in Mexican politicians' and lawmakers' attitudes toward the country's environmental ills, in no small part because of changing public attitudes toward these problems. As Mexico's political system becomes more open and democratic, policy elites are increasingly attentive to environmental problems, as ordinary citizens, and especially urbanites, vent their frustration at the ballot box. Perhaps ironically, Mexico's hydrocarbon industries are potential leaders in the nascent environmental reform process. Inducements for better environmental behavior by the oil and natural gas industries are new, municipal and federal environmental regulations, stepped-up enforcement, and local and cross-border markets for Mexico's gas.     

THE POLITICAL TRADE‐OFF BETWEEN ENVIRONMENTAL STRINGENCY AND ECONOMIC DEVELOPMENT IN RURAL AMERICA*

ABSTRACT We examine the impact of the political trade‐off between rural economic development and environmental quality on the determination of environmental regulations in the U.S. intensive livestock industry. The political economy model, adapted from Fredriksson (1997) , is tested empirically, using state‐level data on environmental regulation of the U.S. livestock sector. We find that state governments respond to greater potential for water pollution with more stringent environmental regulations. Consistent with our political economy model, we also find that states with lower recent growth in per capita income implement less stringent environmental regulations.     

Environmental Regulations and Multinational Corporations' Foreign Market Entry Investments

In this study, we examine how differences in environmental regulation characteristics are linked to multinational corporations' (MNCs) foreign market entry (FME) investments decisions around the world. We rely on a data set with 29,303 observations from 94 European Fortune Global 500 companies operating across 77 countries during the period 2001–2007. We found that MNCs are more likely to enter countries with more certain—i.e., clearer and more stable—environmental regulations than those of their home countries. Results also suggest that there is a higher level of MNC entry into foreign countries with environmental regulations that are more stringent than those of their home countries. This finding challenges the controversial but commonly held view that more stringent environmental regulations deter MNCs' FME investments. Notably, the magnitude of the regulatory certainty relationship with MNCs' FME investments is larger than that of regulatory stringency. Findings also indicate that the increased tendency of MNCs to enter countries with more stringent environmental regulations is higher in more democratic countries and for cleaner industry firms.     

Enclaves in tourism: producing and governing exclusive spaces for tourism

Abstract

Exclusively planned tourism destinations, such as all-inclusive resorts, gated resort communities, private cruise liner-owned islands and privatized beaches, have increased over the last few decades. Researchers have analyzed these kinds of tourism environments as enclaves, which are typically driven by external forces and actors, strongly supported by globalization and the current neoliberal market economy. Existing research shows that tourism enclaves are characterized by active border-making, power issues and material and/or symbolic separation from the surrounding socio-cultural realities, leading to weak linkages with host communities and the local economy. Tourism enclaves involve power inequalities, injustices and unsustainable practices that often have serious negative impacts on local socio-economic development. The articles of the special issue focus on tourism enclaves in different theoretical and geographical contexts and they contribute to our understanding of how these exclusive spaces are created and transformed and how they shape places and place identities. The individual research articles are contextualized and discussed with the key theoretical perspectives and empirical findings on tourism enclaves. Future research needs include analysis of linkages and flows of labor, goods, ideas and capital in different scales; policymaking, planning and regulations; environmental impacts; and locals’ land and resource access in the respect of bordering, privatization and land grabbing. By focusing on these topics, the tourism industry could be guided towards more responsible and sustainable development path.     

THE IMPACT OF REMITTANCES ON REGIONAL CONSUMPTION AND INVESTMENT

This paper examines the effects of international remittances on regional economic development using spatial data from an original household survey carried out in the Republic of Moldova. I analyze remittance flows with a model that estimates regional (urban and rural) budget shares of consumption and investment expenditure categories for rural and urban households. An important contribution of the paper is that it analyzes the effect of remittances in the regions where spending takes place, which is not necessarily the same as the region where the households originating this spending reside. Using the multinomial logit approach, I control for potential selectivity and endogeneity biases of remittances. The results show that remittances lead to significantly increasing marginal productive investments in urban regions at the expense of rural regions. The fundamental finding of the study is that remittances influence the flight of productive capital out of rural areas into urban regions (a pattern similar to the crowding‐out effect of the Dutch Disease). The analysis carried out in this paper can be applied to other temporary income transfers and exogenous spending injected in the region that affect households' regional expenditure patterns.     

Impact of the Russian Financial Crisis on Stock Exchanges in Central and Eastern Europe

A German economist analyses the structure of capital flows to Central and Eastern European countries following the Russian financial crisis in August 1998. Special attention is devoted to the behavior of equity flows and their impact on the stock exchanges in the region and on enterprises' ability to raise capital. In addition, the paper provides an assessment of the effects of the establishment of pension funds on the development of the stock exchanges and evaluates the prospects for several newly established trading places for stocks of companies from Central and Eastern Europe. Journal of Economic Literature, Classification Numbers: F30, G15, G20. 1 figure, 4 tables, 24 references.     

INTERPRETING SPATIAL ECONOMETRIC ORIGIN‐DESTINATION FLOW MODELS

Spatial interaction or gravity models have been used to model flows that take many forms, for example population migration, commodity flows, traffic flows, all of which reflect movements between origin and destination regions. We focus on how to interpret estimates from spatial autoregressive extensions to the conventional regression‐based gravity models that relax the assumption of independence between flows. These models proposed by LeSage and Pace ( 2008 , 2009 ) define spatial dependence involving flows between regions. We show how to calculate partial derivative expressions for these models that can be used to quantify these various types of effect that arise from changes in the characteristics/explanatory variables of the model.     

PUBLIC CAPITAL, REGIONAL OUTPUT, AND DEVELOPMENT: SOME EMPIRICAL EVIDENCE

ABSTRACT The goal of our paper is to provide direct estimates of the association between public capital and regional output. This is made possible by the construction of a data series which measures public capital at the state level.
The relation between public capital and other productive factors is tested using a translog production function. Our results show that labor and public capital are complementary inputs, and that public capital exhibited diminishing returns. We also consider restrictions on the translog formulation. Linear homogeneity is rejected in all cases, and the Cobb-Douglas specification is rejected for the manufacturing and all sectors categories.     

Unravelling Washington's Judgement Calls: The Cases of the Malaysian and Chilean Capital Controls

While the option of constraining cross-border financial flows to emerging markets (capital controls) has taken a backseat in the official policy debates about strengthening the global financial architecture, the International Monetary Fund (IMF) has ceded that certain temporary measures to limit the inflow of hot money may be beneficial in achieving some breathing space for governments. In this sense, capital controls are only to be used as a means to reach the larger end, namely, the proper (neoliberal) management of financial liberalisation. Indeed, by sanctioning a particular type of capital control it is engaging in a political judgement call, which is based upon certain material interests, as opposed to mere economic logic. This becomes evident when we juxtapose two different types of capital controls: the Chilean unremunerated reserve requirement, which was endorsed by the Fund, and, conversely, the IMF's rejection of the Malaysian currency control. I suggest that the IMF's opposition to Malaysian controls stems from its perception that capital restraint on outflows threatens the imperative of free capital mobility, which benefits both the US and transnational financial capitals.     

Spatial Models of Spread-Backwash Processes

Spread-backwash processes are central elements in regional development thought. This article argues that the main spread-backwash processes produce developmental change that has a general spatial form. Straightforward models of the processes of government incomes and expenditure flows, private capital flows, intraregional trade, migration-commuting, and the diffusion of innovations provide the rationale for the general distance decay form of developmental impact. Each model is supported by evidence from the relevant literature. It is argued that there is not a dichotomous set of spread versus backwash processes, but rather that the same set of processes yields differential spatial impacts.     

Integration by Migration?

"In terms of trade and capital flows, the Middle East is one of the least economically integrated regions of the world. The major exception is labor mobility, where intraregional migration flows are extensive. The explanation for this pattern lies in the extreme differences in factor endowments across the region and development policies adopted by both labor-importing and exporting countries. Because the obstacles to trade in goods have been greater than the obstacles to migration, labor mobility and its associated capital flows have been the most important mechanism through which the benefits of the oil windfall have been spread to the poorer states of the region. There is evidence that incomes across the Middle East have become more equal."     

INCOMES,TRADE, AND THE BALANCE OF PAYMENTS WITHIN AN URBAN SYSTEM*

ABSTRACT Attention is initially focused on the principal characteristics of a hierarchical urban system. The structure of trade flows among the various levels of the hierarchy is outlined, and consideration is then given to nontrade flows, these comprising government transfers and capital movements, as well as the associated property-payment flows. An equilibrium model is presented which is concerned with income at each level of the hierarchy. The balance-of-payments implications of the model are explored, and there is a discussion of the manner in which a trade imbalance at a particular level can be sustained in equilibrium.     

Nature's Materiality and the Circuitous Paths of Accumulation: Dispossession of Freshwater Fisheries in Cambodia

This paper examines recent conflicts over freshwater fisheries in Cambodia using the notion of accumulation through dispossession as a conceptual starting point. Despite a recent material turn, theoretical literature on the political economy of the environment has only partially incorporated an ecologically nuanced view of nature into analyses of its transformation under processes of capital accumulation. The biophysical characteristics of riverine fisheries are predicated on the ecohydrologic dynamics of water flows, and these characteristics dictate strategies of appropriation for both subsistence and commercial use. The complexity of these material characteristics is compounded in the case of Cambodian fisheries, where an array of state‐ and market‐driven processes promote the dispossession of resources and constrain the livelihood opportunities of rural communities dependent on fishing. Theories of capital accumulation and how accumulation induces socioecological conflicts can be very useful, firstly, for explaining the origins of environmental conflicts and, secondly, for grounding the analysis of such conflicts in the politics of accumulation as mediated by state actors. Conversely, theoretical framings of primitive accumulation must examine the “things” being accumulated (eg riverine fisheries) in far more biophysically specific ways, and must recognize the circuitous pathways, particularly in cases involving developmental states, that strategies of accumulation follow.     

From Big Noise to Big Data: Toward the Verification of Large Data sets for Understanding Regional Retail Flows

There has been much excitement among quantitative geographers about newly available data sets, characterized by high volume, velocity, and variety. This phenomenon is often labeled as “Big Data” and has contributed to methodological and empirical advances, particularly in the areas of visualization and analysis of social networks. However, a fourth v—veracity (or lack thereof)—has been conspicuously lacking from the literature. This article sets out to test the potential for verifying large data sets. It does this by cross‐comparing three unrelated estimates of retail flows—human movements from home locations to shopping centers—derived from the following geo‐coded sources: (1) a major mobile telephone service provider; (2) a commercial consumer survey; and (3) geotagged Twitter messages. Three spatial interaction models also provided estimates of flow: constrained and unconstrained versions of the “gravity model” and the recently developed “radiation model.” We found positive relationships between all data‐based and theoretical sources of estimated retail flows. Based on the analysis, the mobile telephone data fitted the modeled flows and consumer survey data closely, while flows obtained directly from the Twitter data diverged from other sources. The research highlights the importance of verification in flow data derived from new sources and demonstrates methods for achieving this.