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The Effect of Trade Openness on Deforestation: Empirical Analysis for 142 Countries

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  • Tetsuya, Tsurumi
  • Shunsuke, Managi

Abstract

This study explores the effect of trade openness on deforestation. Previous studies do not find a clear effect of trade openness on deforestation. We use updated data on the annual rate of deforestation for 142 countries from 1990 to 2003, treat trade and income as endogenous, and take into consideration an adjustment process by applying a dynamic model. We find that an increase in trade openness increases deforestation for non-OECD countries while slowing down deforestation for OECD countries. There is a possibility that both capital-labor and environmental-regulation effects have a negative impact on deforestation in developing countries, whereas the opposite holds in developed countries.

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  • Tetsuya, Tsurumi & Shunsuke, Managi, 2011. "The Effect of Trade Openness on Deforestation: Empirical Analysis for 142 Countries," MPRA Paper 35805, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:35805
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    10. Ajanaku, Bolarinwa & Collins, Alan R., 2020. "Economic growth and deforestation in developing countries: Is the Environmental Kuznets Curve Hypothesis Still Applicable? Evidence from a Panel of Selected African Countries," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304271, Agricultural and Applied Economics Association.
    11. William Bekoe & Talatu Jalloh, 2023. "Assessing the Economic Implications of Free Trade on Environmental Quality: Empirical Evidence from Africa," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(1), pages 19-36, January.
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    13. Eisenbarth, Sabrina, 2022. "Do exports of renewable resources lead to resource depletion? Evidence from fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 112(C).
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    19. Novice patrick Bakehe, 2018. "Decomposition of the Environmental Kuznets curve for Deforestation in the Congo Basin," Economics Bulletin, AccessEcon, vol. 38(2), pages 1058-1068.
    20. You, Wan-Hai & Zhu, Hui-Ming & Yu, Keming & Peng, Cheng, 2015. "Democracy, Financial Openness, and Global Carbon Dioxide Emissions: Heterogeneity Across Existing Emission Levels," World Development, Elsevier, vol. 66(C), pages 189-207.
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    More about this item

    Keywords

    Trade Openness; Environment; Comparative Advantage; Deforestation;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • F10 - International Economics - - Trade - - - General

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