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Is the road to regional integration paved with pollution convergence?

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Author Info

  • Leila Baghdadi

    ()
    (LIM-MES Polytechnic School of Tunisia, University of Carthage, Tunisia)

  • Inmaculada Martínez-Zarzoso

    ()
    (Georg-August University of Göttingen and Universitat Jaume I)

  • Celestino Suárez-Burguet

    ()
    (Universitat Jaume I, Department of Economics, Castellón, Spain)

  • Habib Zitouna

    ()
    (LIM-MES Polytechnic School of Tunisia, University of Carthage Tunisia)

Abstract

This paper evaluates the impact of free trade agreements (FTAs) on carbon dioxide emissions convergence for a cross-section of 182 countries over the period 1980 to 2008, paying particular attention to Mediterranean and European Union countries. In order to overcome the endogeneity problem of the FTA variable, a propensity score matching approach is first used to match country pairs. Next the convergence properties of relative CO2 emissions are examined for the whole panel and for the matched sample using difference-in-difference techniques. The main results indicate that CO2 emissions of the pairs of countries that belong to an FTA tend to converge, and do so at a higher rate for more advanced integration agreements. In particular, we find that emissions converge more rapidly for NAFTA and EU-27 countries than for Euro-Med countries.

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Bibliographic Info

Paper provided by Economics Department, Universitat Jaume I, Castellón (Spain) in its series Working Papers with number 2012/03.

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Length: 32 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:jau:wpaper:2012/03

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Keywords: Pollution haven hypothesis; convergence; CO2 emissions; Euro-med Agreements; difference-in-difference.;

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  1. Inmaculada Martínez-Zarzoso, 2008. "The Impact of Urbanization on CO2 Emissions: Evidence from Developing Countries," CESifo Working Paper Series 2377, CESifo Group Munich.
  2. Grossman, Gene & Krueger, Alan B, 1992. "Environmental Impacts of a North American Free Trade Agreement," CEPR Discussion Papers 644, C.E.P.R. Discussion Papers.
  3. Judith M. Dean, 2002. "Does trade liberalization harm the environment? A new test," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 819-842, November.
  4. Bertrand, Olivier & Zitouna, Habib, 2005. "Domestic versus Cross-Border Acquisitions: Which Impact on the Target Frims' Performance?," Working Paper Series 647, Research Institute of Industrial Economics.
  5. MANAGI Shunsuke & HIBIKI Akira & TSURUMI Tetsuya, 2008. "Does Trade Liberalization Reduce Pollution Emissions?," Discussion papers 08013, Research Institute of Economy, Trade and Industry (RIETI).
  6. Sami Bensassi & Laura M�rquez-Ramos & Inmaculada Mart�nez-Zarzoso, 2012. "Economic Integration and the Two Margins of Trade: The Impact of the Barcelona Process on North African Countries' Exports," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(2), pages 228-265, March.
  7. Lopez, Ramon E. & Islam, Asif M., 2008. "Trade and the Environment," Working Papers 45982, University of Maryland, Department of Agricultural and Resource Economics.
  8. Jakob, Michael & Haller, Markus & Marschinski, Robert, 2012. "Will history repeat itself? Economic convergence and convergence in energy use patterns," Energy Economics, Elsevier, vol. 34(1), pages 95-104.
  9. Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November.
  10. Egger, Hartmut & Egger, Peter & Greenaway, David, 2008. "The trade structure effects of endogenous regional trade agreements," Journal of International Economics, Elsevier, vol. 74(2), pages 278-298, March.
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