Empirical Evidence from Transition Economies

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Polish Journal of Environmental Studies Vol. 14, No. 3 (2005), 269-279

International Business and Environmental Issues - Some Empirical Evidence from Transition Economies* Z. Wysokińska**, J. Witkowska
University of Łódź, Rewolucji 1905 41, 90-214 Łódź, Poland


Received: 29 September, 2004 Accepted: 8 December, 2004 Abstract A review of the existing scientific literature regarding world trade and foreign direct investment (FDI), both theoretical and empirical, demonstrates the existence of a growing link between international business and protection of the natural environment, in both positive and negative directions. Some authors voice the opinion that accelerated deregulation and trade liberalization play a particularly important role in this relationship. Environmental norms and standards play a significant role in determining the competitiveness of goods and products on the international market. There are a number of different norms and standards concerning environmental management and the implementation of systems of environmental management. Among the most significant is the EMAS system and the concept of an integrated environmental management system according to ISO 14001 that is based on the fundamental elements of the Total Quality Management (TQM) idea. In light of the explosive expansion of international trade in environmental services that promote “clean” technologies and production equipment, a firm’s proper environmental policies may have a positive effect on the international competitiveness of its products and services, yielding an advantage to those producers and exporters who first initiate and implement them. The aims of this paper are: - to analyze the general impact of international business on the environment in transition economies, - to present the results of macroeconomic comparative research concerning changes in the export and import positions of two selected groups of goods and products in countries which have undergone systemic transformation, - to examine motives of foreign investors for investing in CEE countries connected with environmental issues and to analyze environmental protection strategies implemented by foreign investors, their participation in environmental protection programs and the influence of these activities on the competitiveness of foreign firms, and - to present the results of a survey of 286 enterprises in Poland concerning the relationship between the application of European and international environmental norms and standards and the enterprises’ competitiveness in both domestic and foreign markets prior to Poland’s entrance to the European Union.

‫٭‬Paper presented at the 29th EIBA Conference , 11-13 December 2003, Copenhagen Business School, Denmark. **Corresponding author; e-mail: zofwys@uni.lodz.pl

270 Theoretical Framework Foreign Trade and the Environment International trade becomes a significant contributing factor in effecting strategies of stable development among participating countries when raw material resources are effectively utilized in production and when the cross-border movement of environmentally friendly products and technology is encouraged. Trade and free trade policies regarding the movement of goods have a significant impact on the environment and should be closely connected with the basic standards of environmental protection policies. In countries with high environmental protection standards, losses resulting from environmental destruction have been assessed at 1-2% of GNP, while in countries with much lower standards of protection, these losses have been known to reach 3-5% of GNP [1]. Applicable regulations regarding environmental protection standards may encompass both the protection of indigenous natural resources as well as bans on the import of goods that may be harmful to the environment, such as large vehicles with excessive emissions that pollute the air, products containing heavy metal compounds such as lead, very...
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