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Environmental regulation impacts on international trade: aggregate and sectoral analyses with a bilateral trade flow model

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  • Cees van Beers, Jeroen C.J.M. van den Bergh

Abstract

An important barrier to the implementation of strict environmental regulations is that they are perceived to negatively affect a country's competitiveness, visible through changes in international trade. Whereas theoretical analyses of trade and the environment indicate that relatively strict environmental policies can have a strong impact on foreign trade, empirical studies present mixed results. This article presents new empirical results that tie together two previous studies employing a multicountry econometric framework, notably Tobey and van Beers and van den Bergh. Such a link is useful since most empirical studies on trade and environment use unique assumptions and models, thus making a comparison of findings difficult. Since Tobey's study has been particularly influential on writings in this area, a statistical analysis has been performed using a data set that shares many characteristics with his study. The main improvement in the approach adopted here is the use of bilateral instead of multilateral data and analyses of aggregate as well as sector level data. The aggregate results for 1975 support Tobey's findings, namely that no significant impact on international trade is caused by stricter national environmental policies. The results for 1992 do not demonstrate a significant impact either. Finally, new sector level results for 1992 show some interesting similarities with those of Tobey's.

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Bibliographic Info

Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Global Environmental Issues.

Volume (Year): 3 (2003)
Issue (Month): 1 ()
Pages: 14-29

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Handle: RePEc:ids:ijgenv:v:3:y:2003:i:1:p:14-29

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Web page: http://www.inderscience.com/browse/index.php?journalID=14

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Keywords: environmental policies; international trade.;

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Cited by:
  1. Costantini, Valeria & Crespi, Francesco, 2007. "Environmental regulation and the export dynamics of energy technologies," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 200708, University of Turin.
  2. Valeria Costantini & Francesco Crespi, 2013. "Public policies for a sustainable energy sector: regulation, diversity and fostering of innovation," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 401-429, April.
  3. Costantini, Valeria & Mazzanti, Massimiliano, 2012. "On the green and innovative side of trade competitiveness? The impact of environmental policies and innovation on EU exports," Research Policy, Elsevier, vol. 41(1), pages 132-153.
  4. Felix Groba & Barbara Breitschopf, 2013. "Impact of Renewable Energy Policy and Use on Innovation: A Literature Review," Discussion Papers of DIW Berlin 1318, DIW Berlin, German Institute for Economic Research.

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