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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. Nicole A. MATHYS & Jaime de MELO, 2010. "Trade and Climate Change: The Challenges Ahead," Working Papers P14, FERDI.
  2. Naughton, Helen Tammela, 2010. "Globalization and Emissions in Europe," MPRA Paper 27684, University Library of Munich, Germany.
  3. 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.
  4. 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.
  5. Mona Haddad & Ben Shepherd, 2011. "Managing Openness : Trade and Outward-oriented Growth After the Crisis," World Bank Publications, The World Bank, number 2283, July.
  6. 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.
  7. 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.
  8. Managi, Shunsuke, 2012. "Trade, economic growth and environment," IDE Discussion Papers 342, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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