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International trade and environmental policy: how effective is 'eco-dumping'?

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  • Xu, Xinpeng

Abstract

The effects of environmental regulations on the international competitiveness of domestic industries have become an increasing concern in the trade liberalisation process in the 1990s. This paper examines the significance of environmental policy for trade. A generalised GNP function, which incorporates both technology changes and increasing returns to scale is set up and a flexible translog function form is used to approximate this generalised GNP function. Seemingly unrelated regression is employed to estimate a system of sectoral share equations derived from the generalised GNP function. The basic hypothesis is that while the environmental factor is not a significant determinant of the international competitiveness of environmentally sensitive industries, technology is. The result supports this hypothesis and suggests that socalled eco-dumping is not an effective strategy in this context.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 17 (2000)
Issue (Month): 1 (January)
Pages: 71-90

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Handle: RePEc:eee:ecmode:v:17:y:2000:i:1:p:71-90

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Web page: http://www.elsevier.com/locate/inca/30411

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References

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  1. Schelling, Thomas C, 1992. "Some Economics of Global Warming," American Economic Review, American Economic Association, vol. 82(1), pages 1-14, March.
  2. Tobey, James A, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Wiley Blackwell, vol. 43(2), pages 191-209.
  3. James R. Markusen, 1996. "Costly Pollution Abatement, Competitiveness, and Plant Location Decisions," NBER Working Papers 5490, National Bureau of Economic Research, Inc.
  4. James Brander & M. Scott Taylor, 1997. "International Trade Between Consumer and Conservationist Countries," NBER Working Papers 6006, National Bureau of Economic Research, Inc.
  5. Susmita Dasgupta & Ashoka Mody & Subhendu Roy & David Wheeler, 2001. "Environmental Regulation and Development: A Cross-country Empirical Analysis," Oxford Development Studies, Taylor & Francis Journals, vol. 29(2), pages 173-187.
  6. Ulrich R. Kohli, 1978. "A Gross National Product Function and the Derived Demand for Imports and Supply of Exports," Canadian Journal of Economics, Canadian Economics Association, vol. 11(2), pages 167-82, May.
  7. Xinpeng Xu, 1998. "Export Performance Of Environmentally Sensitive Goods : A Global Perspective," Trade Working Papers 22866, East Asian Bureau of Economic Research.
  8. Harrigan, James, 1997. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model," American Economic Review, American Economic Association, vol. 87(4), pages 475-94, September.
  9. Drysdale, Peter, 1998. "Japan's approach to Asia Pacific economic cooperation," Journal of Asian Economics, Elsevier, vol. 9(4), pages 547-554.
  10. Rauscher, Michael, 1994. "On Ecological Dumping," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 822-40, Supplemen.
  11. Diewert, W E, 1974. "Functional Forms for Revenue and Factor Requirements Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 119-30, February.
  12. Davies, Stephen W. & McGuinness, Anthony J., 1982. "Dumping at less than marginal cost," Journal of International Economics, Elsevier, vol. 12(1-2), pages 169-182, February.
  13. Dean, Judith M., 1992. "Trade and the environment : a survey of the literature," Policy Research Working Paper Series 966, The World Bank.
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Cited by:
  1. Zhu, Xueqin & van Ierland, Ekko, 2006. "The enlargement of the European Union: Effects on trade and emissions of greenhouse gases," Ecological Economics, Elsevier, vol. 57(1), pages 1-14, April.

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