Seoul, October 17, 2025
News Summary
An international research team has introduced a ‘green haven’ strategy for manufacturing eco-friendly products, challenging the pollution haven theory. This innovative approach advocates for production in countries with strict environmental regulations, demonstrating that green products thrive in such environments. Led by Professor Narae Lee from KAIST, the study analyzed extensive trade data, revealing that stronger environmental laws enhance the competitiveness of green products in global markets. The findings are set to influence both academic research and policymaking for sustainable manufacturing practices.
Seoul
A joint international research team has proposed a new strategy for competitive green product manufacturing, challenging the traditional ‘pollution haven’ hypothesis. This innovative approach suggests that companies should seek a ‘green haven’ instead, where manufacturing aligns with strict environmental regulations. The research was led by Professor Narae Lee from KAIST College of Business along with Professors Heather Berry and Jasmina Chauvin from Georgetown University and Professor Yuxi Lance Cheng from the University of Texas.
The findings indicate that green products, which are defined as eco-friendly goods that contribute to less environmental pollution, become more competitive when they are produced in countries with rigorous environmental laws. This new perspective emerges in the context of shifting global trade, where multinational corporations historically preferred countries with weaker environmental regulations for production. However, the increasing emphasis on climate change responses and ESG (Environmental, Social, Governance) management is accelerating the growth of global trade in green products.
The research team conducted a thorough analysis using data from ‘UN Comtrade,’ a comprehensive global trade database that includes records from 92 importing countries, 70 exporting countries, and around 5,000 products, covering the period from 2002 to 2019. The results initially revealed the common pollution haven effect, indicating that as environmental regulations in countries increase, the overall trade volume tends to decrease. However, an encouraging trend emerged showing that trade in green products actually increased under stricter regulations. This suggests that more robust environmental policies enhance both the export and sourcing of green products.
Moreover, companies are increasingly favoring countries with strong regulations due to their appeal for transparency and legitimacy in eco-friendly production and transactions. This preference is markedly evident in sectors that involve final consumer goods such as smartphones, clothing, food, cosmetics, and automobiles. The tendency toward greener trade was even more pronounced for products exported to regions with active environmental movements or engaged NGOs, demonstrating a shift in the priorities of global supply chains.
Professor Lee highlighted that contemporary global supply chains are increasingly influenced by the notion of environmental legitimacy, rather than merely cost efficiency. Stronger environmental policies are shown to be beneficial for corporate activities, enhancing the competitiveness of green products. The research findings were published on September 1 in the Journal of International Business Studies (JIBS), a leading academic journal in international business, and are available for free through KAIST’s Open Access publication. The applications of these findings are expected to have significant implications in both academic research and policymaking contexts.
FAQ
What new strategy for competitive green product manufacturing was proposed by international researchers?
What types of products are referred to as ‘green products’?
How was this research conducted and what was the key finding?
What implications does this research have for global trade?
Key Features of ‘Green Haven’ Strategy
| Feature | Description |
|---|---|
| Research Team | Led by Professor Narae Lee, with collaborators from Georgetown University and University of Texas. |
| Data Analysis | Data from UN Comtrade covering 92 importing countries and 70 exporting countries from 2002 to 2019. |
| Findings | Increased trade in green products under stricter regulations, contrary to pollution haven theory. |
| Publication | Published in the Journal of International Business Studies on September 1. |
| Policy Implications | Insights can aid in academic research and policymaking for greener manufacturing practices. |
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Additional Resources
- Mirage News
- Wikipedia: Environmental Policy
- Yale Daily News
- Google Search: Green Manufacturing Strategy
- Seeking Alpha
- Google Scholar: Eco-friendly Products
- Slate
- Encyclopedia Britannica: ESG
- Orillia Matters
- Google News: Climate Change Regulations
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