One of the difficulties in trying to determine the validity of the pollution haven hypothesis is that
A) weaker environmental regulation and enforcement is not the only criteria for deciding where to locate a firm.
B) globalization has made it difficult for firms to relocate from one country to another.
C) countries may have strict environmental laws but enforcement may be lacking.
D) companies may locate in a country with strict environmental policy but break the law.

Question

Quizplus · Accepted Answer

The pollution haven hypothesis suggests that firms relocate to countries with weaker environmental regulations. However, determining its validity is difficult because firms consider multiple factors, not just environmental regulations, when deciding where to locate.

One of the Difficulties in Trying to Determine the Validity