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Degree of environmental stringency and the impact on trade patterns

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Author Info

  • Selim Cagatay
  • Hakan Mihci

Abstract

Purpose – To construct an index (index of environmental sensitivity performance) to be used in a cross-country trade model in order to analyze the effect of various degrees of environmental stringency on the trade patterns, and especially on the export performance of the countries. Design/methodology/approach – The gravity model of trade is used in order to find the effects of environmental stringency on the variation in trade flows. Findings – The study shows that environmental stringency has an important impact on the export of the countries. The impact of the degree of environmental stringency on the exports is significantly negative suggesting an inverse relationship between export values and relative environmental sensitivity performance of the nations. Originality/value – This study supports the argument that the environmental stringency level differential between developing and developed nations is a crucial criteria in terms of explaining shifts in the trade patterns and international specialization of the countries.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal Journal of Economic Studies.

Volume (Year): 33 (2006)
Issue (Month): 1 (January)
Pages: 30-51

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Handle: RePEc:eme:jespps:v:33:y:2006:i:1:p:30-51

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Related research

Keywords: Environmental regulations; Export markets; International trade; Pollution;

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Citations

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Cited by:
  1. Jean-Marie GRETHER & Nicole A. MATHYS & Jaime DE MELO, 2006. "Unraveling the World-Wide Pollution Haven Effect," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 06.04, Université de Lausanne, Faculté des HEC, DEEP.
  2. Leiter, Andrea M. & Parolini, Arno & Winner, Hannes, 2011. "Environmental regulation and investment: Evidence from European industry data," Ecological Economics, Elsevier, vol. 70(4), pages 759-770, February.
  3. de santis, roberta, 2011. "Impact of environmental regulations on trade in the main EU countries: conflict or synergy?," MPRA Paper 37756, University Library of Munich, Germany.
  4. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2011. "Foreign direct investment, environmentally sound technology and informal sector," MPRA Paper 31447, University Library of Munich, Germany.
  5. Hakan Mıhcı & Selim Çağatay & Onur A. Koska, 2011. "The determinants of foreign direct investment outflows from the European Union countries," Economics Bulletin, AccessEcon, vol. 31(3), pages 2653-2666.

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