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International Trade And Evnvironmental Policy : How Effective Is €˜eco-Dumpingã¢Â‚¬Â„¢?

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  • Xinpeng Xu

    (AJRC)

Abstract

The effects of environmental regulations on the international competitiveness of domestic industries have become an increasing concern in the trade liberalisation process in the 1990s. This paper examines the significance of environmental policy for trade. A generalised GNP function, which incorporates both technology changes and increasing returns to scale is set up and a flexible translog function form is used to approximate this generalised GNP function. Seemingly unrelated regression is employed to estimate a system of sectoral share equations derived from the generalised GNP function. The basic hypothesis is that while the environmental factor is not a significant determinant of the international competitiveness of environmentally sensitive industries, technology is. The result supports this hypothesis and suggests that socalled eco-dumping is not an effective strategy in this context.

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File URL: http://www.eaber.org/node/22867
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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Trade Working Papers with number 22867.

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Date of creation: Jan 1999
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Handle: RePEc:eab:tradew:22867

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Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org
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Keywords: environmental regulations; Trade Liberalisation; GNP;

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