The 5th International Conference on Digitalization and Management Innovation (DMI2026)

Abstract: It is hoped that the provision of technology through the Clean Development Mechanism stimulates innovation and encourage developing countries to decontaminate and decarbonise. However, in countries with immature property rights and political systems, there is a risk that imitation of developed countries' technology and tax evasion involving bribery occur, and that the pollution haven hypothesis arises as a result of environmental policies. This study presents the mechanism of the pollution haven hypothesis by analysing the impact of environmental taxes, environmental tax evasion, and intellectual property rights (IPR) on economic growth, pollution, market share, corruption, and imitation in the North-South model with imitation. Economic growth and pollution reduction through environmental taxation in South imply the Porter hypothesis, but environmental tax evasion impedes this hypothesis. Environmental tax cuts in South with low IPR levels and tax evasion in South with high IPR levels lead to an increase in imitation rates, in addition to pollution havens and leakage from North to South, through labour migration between the manufacturing sector and the R&D sector. Depending on the IPR level in South, it is possible to avoid this pollution haven hypothesis. The deterioration of the quality of the political system by reducing fines for corrupt officials leads to the political pollution haven hypothesis, regardless of the level of IPR, but it can be avoided by improving the quality of the political system. This study suggests that the pollution haven hypothesis can be avoided by appropriate institutional design for patent rights and environmental regulations.

Keywords: imitation, intellectual property rights, tax evasion, corruption, political pollution havens hypothesis

Biography: Dr.Yoshihiro Hamaguchi received his PhD from Osaka University in March 2020 and currently serves as Professor of Macroeconomics at Hannan University, Osaka, Japan. His research aims to identify the mechanisms of sustainable development, utilising macroeconomic theories of economic growth and analytical methods from international and political economics. His research to date has elucidated how environmental policies can lead to pollution reduction and economic growth through innovation and he has applied his findings to the pollution haven hypothesis, sustainable tourism and sustainable finance. He has received several research grants from the Japan Society for the Promotion of Science (JSPS), reported his research at numerous peer-reviewed international conferences and published in the Journal of Macroeconomics, Tourism Economics, Transport Policy, Frontiers in Marine Science, China & World Economy, Environment, Development and Sustainability, Journal of Environmental Management, among others. Some of these papers were commended for obtaining the highest number of citations in a year. He is currently actively pursuing collaborative research with researchers around the world.