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Globalization and Dirty Industries: Do Pollution Havens Matter?

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Author Info
de Melo, Jaime
Grether, Jean-Marie

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Abstract

This Paper reviews arguments and evidence on the impact of globalization on the environment, then presents evidence on production and international trade flows in five heavily polluting industries for 52 countries over the period 1981-98. A new decomposition of revealed comparative advantage (RCA) according to geographical origin reveals a delocalization to the South for all heavily polluting industries except non-ferrous metals that exhibits South-North delocalization in accordance with factor-abundance driven response to a reduction in trade barriers. Panel estimation of a gravity model of bilateral trade on the same data set reveals that, on average, polluting industries have higher barriers-to-trade costs (except non-ferrous metals with significantly lower barriers to trade) and little evidence of delocalization in response to a North-South regulatory gap.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3932.

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Date of creation: Jun 2003
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Handle: RePEc:cpr:ceprdp:3932

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Related research
Keywords: gravity model; revealed comparative advantage; trade and the environment;

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Find related papers by JEL classification:
Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Dean, Judith M., 1992. "Trade and the environment : a survey of the literature," Policy Research Working Paper Series 966, The World Bank. [Downloadable!]
  2. Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-74, September. [Downloadable!] (restricted)
  3. 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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  4. Wolfgang Keller & Arik Levinson, 2002. "Pollution Abatement Costs and Foreign Direct Investment Inflows to U.S. States," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 691-703, 07. [Downloadable!] (restricted)
  5. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September. [Downloadable!] (restricted)
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  6. van Beers, Cees & van den Bergh, Jeroen C J M, 1997. "An Empirical Multi-country Analysis of the Impact of Environmental Regulations on Foreign Trade Flows," Kyklos, Blackwell Publishing, vol. 50(1), pages 29-46.
  7. Arik Levinson & M. Scott Taylor, 2004. "Unmasking the Pollution Haven Effect," NBER Working Papers 10629, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Josh Ederington & Jenny Minier, 2000. "Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis," Econometric Society World Congress 2000 Contributed Papers 1507, Econometric Society. [Downloadable!]
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  9. Hausman, Jerry A. & Taylor, William E., 1981. "Panel data and unobservable individual effects," Journal of Econometrics, Elsevier, vol. 16(1), pages 155-155, May. [Downloadable!] (restricted)
  10. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-98, November. [Downloadable!] (restricted)
  11. Brun, Jean-François & Carrère, Céline & de Melo, Jaime & Guillaumont, Patrick, 2002. "Has Distance Died? Evidence from a Panel Gravity Model," CEPR Discussion Papers 3500, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Busse, Matthias, 2004. "Trade, environmental regulations and the World Trade Organization : new empirical evidence," Policy Research Working Paper Series 3361, The World Bank. [Downloadable!]
  2. Alireza Naghavi, 2005. "Multilateral Environmental Agreements and Trade Obligations: A Theoretical Analysis of the Doha Proposal," Working Papers 2005.52, Fondazione Eni Enrico Mattei. [Downloadable!]
  3. de Melo, Jaime & Grether, Jean-Marie & Mathys, Nicole Andréa, 2007. "Trade, Technique and Composition Effects: What is Behind the Fall in World-wide SO2 Emissions, 1990-2000?," CEPR Discussion Papers 6522, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Francesco Crespi & Valeria Costantini, 2007. "Environmental Regulation and the Export Dynamics of Energy Technologies," Working Papers 2007.53, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  5. Alireza Naghavi, 2008. "Trade Sanctions and Green Trade Liberalization," Center for Economic Research (RECent) 011, University of Modena and Reggio E., Dept. of Economics. [Downloadable!]
  6. Matthew Kahn & Yutaka Yoshino, 2004. "Testing for Pollution Havens Inside and Outside of Regional Trading Blocs," Advances in Economic Analysis & Policy, Berkeley Electronic Press, vol. 4(2), pages 1288-1288. [Downloadable!] (restricted)
  7. de Melo, Jaime & Grether, Jean-Marie & Mathys, Nicole Andréa, 2006. "Unravelling the World-Wide Pollution Haven Effect," CEPR Discussion Papers 5815, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Toru Iwami, 2006. "Globalization and Pollution Industries in East Asia," CIRJE F-Series CIRJE-F-394, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  9. Alireza Naghavi, 2006. "Can R&D-Inducing Green Tariffs Replace International Environmental Regulations?," Working Papers 2006.92, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
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