Pollutant emissions from manufacturers in the U.S. dropped significantly in the last two decades as a result of globalization which allow the production of pollution-intensive goods to be shifted overseas, according to a recent joint study by the University of Michigan and Shanghai Jiaotong University.
"We found that domestic plants pollute less on American soil as their parent firm imports more from low-wage countries. They also shift production to less pollution-intensive industries, produce less waste and spend less on pollution abatement," said Yue Maggie Zhou, assistant professor of strategy at University of Michigan's Ross School of Business.
The study conducted by Zhou and Xiaoyang Li of Shanghai Jiaotong University found that emissions of major air pollutants by U.S. manufacturers fell more than half between 1992 and 2009, despite significant growth in real U.S. manufacturing output. Also during this period, their analysis showed that the share of U.S. imports from low-wage countries rose to 23 percent from 7 percent.
"Industries that experienced the greatest increase in imports from low-wage countries-printing, apparel and textile, rubber and plastics, and furniture-experienced some of the largest drops in air pollution emissions," Zhou said.
The researchers analyzed statistics of more than 8,000 firms and 18,000 plants from the U.S. Census Bureau at the firm level, where production-pollution decisions are made.
However, not all U.S. firms choose to "offshore pollution." Zhou and Li also found that the negative impact of imports from overseas on emissions is stronger for U.S. plants located in countries with greater institutional pressure for environmental performance.