Does trade openness improve environmental quality?

Managi, Shunsuke, Hibiki, Akira, & Tsurumi, Tetsuya (2009) Does trade openness improve environmental quality? Journal of Environmental Economics and Management, 58(3), pp. 346-363.

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The literature on trade openness, economic development, and the environment is largely inconclusive about the environmental consequences of trade. This study treats trade and income as endogenous and estimates the overall impact of trade openness on environmental quality using the instrumental variables technique. We find that whether or not trade has a beneficial effect on the environment varies depending on the pollutant and the country. Trade is found to benefit the environment in OECD countries. It has detrimental effects, however, on sulfur dioxide (SO2) and carbon dioxide (CO2) emissions in non-OECD countries, although it does lower biochemical oxygen demand (BOD) emissions in these countries. We also find the impact is large in the long term, after the dynamic adjustment process, although it is small in the short term.

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ID Code: 75485
Item Type: Journal Article
Refereed: Yes
Keywords: Comparative advantage; Composition effect; Environment; Environmental regulations effect; Scale effect; Technique effect; Trade openness
DOI: 10.1016/j.jeem.2009.04.008
ISSN: 1096-0449
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: © 2009 Elsevier Inc. All rights reserved.
Deposited On: 24 Aug 2014 23:38
Last Modified: 26 Aug 2014 02:28

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