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2018-10-18

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Environment
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This refers to the hypothesis that companies that cause a lot of environmental pollution generally prefer to set up their factories and other facilities in developing countries that have lax environmental regulations. This is because complying with the tough environmental standards in developed countries is usually a costly affair. So it makes economic sense to locate operations in countries with poor environmental standards. Apart from lax environmental regulations, people and policymakers in developing countries also attach a lower value to the need for a clean environment.

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