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Trade-induced technological change: Analyzing economic and environmental outcomes

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  • Managi, Shunsuke
  • Kumar, Surender

Abstract

We analyze how changes in trade openness are related to induced technological innovations that are not only GDP increasing but also pollution saving. Our model includes by-products of carbon dioxide and sulfur dioxide emissions. We estimate a directional distance function for 76 countries over the period 1963-2000 to measure exogenous and trade-induced technological change. On average, we find substantial trade-induced technological progress, and its magnitude is about one third of the overall technological change. The trade-induced technological changes, however, are GDP reducing and pollution increasing. Empirically, we find that increased trade openness correlates to increased pollution.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 26 (2009)
Issue (Month): 3 (May)
Pages: 721-732

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Handle: RePEc:eee:ecmode:v:26:y:2009:i:3:p:721-732

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

Related research

Keywords: Trade-induced technological change Exogenous technological change Environmental effects Total factor productivity Directional distance function;

References

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Citations

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Cited by:
  1. Barros, Carlos Pestana & Managi, Shunsuke, 2009. "Regulation, pollution and heterogeneity in Japanese steam power generation companies," Energy Policy, Elsevier, vol. 37(8), pages 3109-3114, August.
  2. Nicole A. MATHYS & Jaime de MELO, 2010. "Trade and Climate Change: The Challenges Ahead," Working Papers P14, FERDI.
  3. Vouldis, Angelos T. & Michaelides, Panayotis G. & Tsionas, Efthymios G., 2010. "Estimating semi-parametric output distance functions with neural-based reduced form equations using LIML," Economic Modelling, Elsevier, vol. 27(3), pages 697-704, May.
  4. Managi, Shunsuke, 2012. "Trade, economic growth and environment," IDE Discussion Papers 342, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  5. Catherine Boulatoff & Michael Jenkins, 2010. "Long-term Nexus Between Openness, Income, and Environmental Quality," International Advances in Economic Research, Springer, vol. 16(4), pages 410-418, November.
  6. Mona Haddad & Ben Shepherd, 2011. "Managing Openness : Trade and Outward-oriented Growth After the Crisis," World Bank Publications, The World Bank, number 2283, October.
  7. Naughton, Helen Tammela, 2010. "Globalization and Emissions in Europe," MPRA Paper 27684, University Library of Munich, Germany.
  8. Kumar, Surender & Managi, Shunsuke, 2009. "Energy price-induced and exogenous technological change: Assessing the economic and environmental outcomes," Resource and Energy Economics, Elsevier, vol. 31(4), pages 334-353, November.

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