Sources of Comparative Advantage in Polluting Industries
AbstractWe study the determinants of comparative advantage in polluting industries. We combine data on environmental policy at the country level with data on pollution intensity at the industry level to show that countries with laxer environmental regulation have a comparative advantage in polluting industries. Further, we address the potential problem of reverse causality. We propose an instrument for environmental regulation based on meteorological determinants of pollution dispersion identified by the atmospheric pollution literature. We find that the effect of environmental regulation on the pattern of trade is causal and comparable in magnitude to the effect of physical and human capital.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9111.
Date of creation: Sep 2012
Date of revision:
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Other versions of this item:
- Fernando Broner & Paula Bustos & Vasco Carvalho, 2012. "Sources of Comparative Advantage in Polluting Industries," Working Papers 655, Barcelona Graduate School of Economics.
- Fernando Broner & Paula Bustos & Vasco M. Carvalho, 2012. "Sources of Comparative Advantage in Polluting Industries," NBER Working Papers 18337, National Bureau of Economic Research, Inc.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F18 - International Economics - - Trade - - - Trade and Environment
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-ENE-2012-09-09 (Energy Economics)
- NEP-ENV-2012-09-09 (Environmental Economics)
- NEP-RES-2012-09-09 (Resource Economics)
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