Abstract
This chapter examines demand-side effects of EU restriction on hazardous substances (RoHS) and REACH regulations in terms of enhancing export market access by firms exporting from Malaysia and Vietnam. The analysis finds that firms’ compliance with the RoHS and REACH regulations promotes access to the EU export market. However, compliance is also associated with a reduction in the number of markets to which firms export and leads to concentration of exports to the EU market. The analysis also finds that firms facing requests from customers to implement measures relating to chemicals in their products or that obtain ISO 9001 or 14001 certification are more likely to comply with RoHS and REACH regulations. They may receive help to comply with the regulations, or pressure from their customers to achieve compliance.
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- 1.
We control for the endogeneity of the technical regulation variable in the ordered probit model by running a linear probability model in the first stage and replacing Std ij by the predicted value from the first-stage estimation.
- 2.
We also use the predicted value of the linear probability model of the technical regulation variable for Std ij in this model.
- 3.
It should be noted that the inverse mills ratios are insignificant in both tables, implying that sample selection is not severe enough to cause the biased coefficient estimators.
- 4.
We maintain our specification of instrumental variables from the previous tables (except that we replace the GVC variable with our linkage indices) despite the fact that the models in Tables 10.6 and 10.7 fail to satisfy some of the qualification tests for instrumental variables. This is done for the sake of comparison.
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Acknowledgment
We gratefully acknowledge the financial supports given by JSPS KAKENHI Grant Number JP15H03350 and JP26780152.
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Honda, K., Otsuki, T. (2017). Effects of Chemical Safety Standards on Export Performance in Malaysia and Vietnam. In: Michida, E., Humphrey, J., Nabeshima, K. (eds) Regulations and International Trade. IDE-JETRO Series. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-55041-1_10
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DOI: https://doi.org/10.1007/978-3-319-55041-1_10
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