Regulatory distance and the transfer of new environmentally sound technologies: evidence from the automobile sector

Regulatory distance and the transfer of new environmentally sound technologies: evidence from the automobile sector This report examines the impact of environmental regulation within countries as well as regulatory distance between countries on international technology transfer. Analysis shows that an important factor shaping transfers is relative regulatory distance in that countries are more likely to receive newly-innovated technologies from source countries whose regulatory standards are “closer” to their own. Absolute stringency matters as well, consistent with conventional wisdom, although raising domestic environmental standards as such only leads to higher inflows of environmentally sound technologies (ESTs) in developing countries.