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Relationship between Trade Openness and Carbon Emission: A Case of Bangladesh

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  • M. Zillur Rahman

Abstract

This study attempts to empirically test the causality between trade openness and carbon dioxide emission in Bangladesh context applying time-series econometric techniques covering 1972-2009 periods. The author tests this interrelationship in a vector autoregressive (VAR) framework followed by Granger causality, impulse response function to find the plausible causal relationship, direction of causality and the likely impact of one variable on the other. The VAR was tested for its stability also. The Granger causality analysis finds inconclusive causal relationship between variables. But the impulse response function derived through the stable unrestricted VAR model resulted in significant impact of trade liberalization on carbon emission but not any in the reverse order. This study is important for policy makers of Bangladesh and the countries alike.

Suggested Citation

  • M. Zillur Rahman, 2013. "Relationship between Trade Openness and Carbon Emission: A Case of Bangladesh," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 1(4), pages 126-134.
    • Handle: RePEc:rss:jnljee:v1i4p3
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