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A Note on the Empirical Relationship Between Trade, Growth and the Environment

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Author Info
Jose Mendez () (W. P. Carey School of Business Department of Economics)
Lewis Gale (University of Southern Louisiana)

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Abstract

This note reestimates Grossman and Krueger’s (1993) SO2 emissions regression including regressors to capture the effects of scale, trade and trade policy. Several new results are obtained. Increases in economic activity have a negative effect on the environment separate from changes in per capita income, whose relation to the environment is now positive and linear not inverted-U shaped. The trade policy measure is not significant, but its effect is ambiguous a priori. Finally, in line with specialization patterns based on traditional sources of comparative advantage, pollution rises with the capital abundance of a country (since this favors capital-intensive and generally dirtier industries) and falls with increases in labor and land abundance.

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Paper provided by Department of Economics, W. P. Carey School of Business, Arizona State University in its series Working Papers with number 2132836.

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Handle: RePEc:asu:wpaper:2132836

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Find related papers by JEL classification:
Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
O1 - Economic Development, Technological Change, and Growth - - Economic Development
F1 - International Economics - - Trade

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  1. Copeland, Brian R & Taylor, M Scott, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 755-87, August. [Downloadable!] (restricted)
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  2. Grossman, Gene, 1993. "Pollution and Growth: What Do We Know?," CEPR Discussion Papers 848, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
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  1. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 1998. "Is Free Trade Good for the Environment?," NBER Working Papers 6707, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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