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Globalization and Environment: Can Pollution Haven Hypothesis alone explain the impact of Globalization on Environment?

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  • Dinda, Soumyananda

Abstract

The economic literature on trade and environment seeks empirically test hypotheses about how trade affects the environment that is crucial for resolving current policy debates. Applying panel data technique we examine the impacts of globalization on pollution level, pollution intensity and relative change of pollution for the developed (OECD) and developing (Non-OECD) country groups and the world as a whole. This paper examines the factor endowment and pollution haven hypotheses that predict how trade affects the environment. Interaction effects also play a crucial role to determine the impact of globalization on environment. In this study we use CO2 emission and observe that the impact of globalization on environment heavily depends on the basic characteristics of a country and its dominating comparative advantage. The empirical results suggest that globalization increases CO2 emission, which is the main culprit of the global warming.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 50590.

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Date of creation: 15 Aug 2006
Date of revision: 15 Oct 2006
Handle: RePEc:pra:mprapa:50590

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Keywords: Globalization; pollution haven hypothesis; factor endowment hypothesis; and interaction effect;

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References

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  1. Copeland,B.R. & Scott Taylor,M., 2003. "Trade, growth and the environment," Working papers, Wisconsin Madison - Social Systems 10, Wisconsin Madison - Social Systems.
  2. Dinda, Soumyananda & Coondoo, Dipankor, 2001. "Income and Emission: A Panel Data based Cointegration Analysis," MPRA Paper 50591, University Library of Munich, Germany, revised 10 Mar 2003.
  3. Cole, Matthew A., 2004. "Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages," Ecological Economics, Elsevier, Elsevier, vol. 48(1), pages 71-81, January.
  4. Grossman, Gene & Krueger, Alan B, 1992. "Environmental Impacts of a North American Free Trade Agreement," CEPR Discussion Papers, C.E.P.R. Discussion Papers 644, C.E.P.R. Discussion Papers.
  5. Hettige, Hemamala & Lucas, Robert E B & Wheeler, David, 1992. "The Toxic Intensity of Industrial Production: Global Patterns, Trends, and Trade Policy," American Economic Review, American Economic Association, American Economic Association, vol. 82(2), pages 478-81, May.
  6. Tisdell, Clem, 2001. "Globalisation and sustainability: environmental Kuznets curve and the WTO," Ecological Economics, Elsevier, Elsevier, vol. 39(2), pages 185-196, November.
  7. Brock, William A. & Taylor, M. Scott, 2005. "Economic Growth and the Environment: A Review of Theory and Empirics," Handbook of Economic Growth, Elsevier, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 28, pages 1749-1821 Elsevier.
  8. Coondoo, Dipankor & Dinda, Soumyananda, 2002. "Causality between income and emission: a country group-specific econometric analysis," Ecological Economics, Elsevier, Elsevier, vol. 40(3), pages 351-367, March.
  9. Liddle, Brantley, 2001. "Free trade and the environment-development system," Ecological Economics, Elsevier, Elsevier, vol. 39(1), pages 21-36, October.
  10. Agras, Jean & Chapman, Duane, 1999. "A dynamic approach to the Environmental Kuznets Curve hypothesis," Ecological Economics, Elsevier, Elsevier, vol. 28(2), pages 267-277, February.
  11. Suri, Vivek & Chapman, Duane, 1998. "Economic growth, trade and energy: implications for the environmental Kuznets curve," Ecological Economics, Elsevier, Elsevier, vol. 25(2), pages 195-208, May.
  12. Umed Temurshoev, 2006. "Pollution Haven Hypothesis or Factor Endowment Hypothesis: Theory and Empirical Examination for the US and China," CERGE-EI Working Papers wp292, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  13. Lopez Ramon, 1994. "The Environment as a Factor of Production: The Effects of Economic Growth and Trade Liberalization," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 163-184, September.
  14. Bommer, Rolf, 1999. "Environmental Policy and Industrial Competitiveness: The Pollution-Haven Hypothesis Reconsidered," Review of International Economics, Wiley Blackwell, vol. 7(2), pages 342-55, May.
  15. Hettige, Hemamala & Mani, Muthukumara & Wheeler, David, 2000. "Industrial pollution in economic development: the environmental Kuznets curve revisited," Journal of Development Economics, Elsevier, Elsevier, vol. 62(2), pages 445-476, August.
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Cited by:
  1. Muhammad Umer Author_Email: mohd.umer@gmail.com & M. Farooq Hussain & Miss Hanniya Abid, 2011. "Facing Challenges In The Global Environment: A Study Of International Business Transformation," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding, Conference Master Resources 2011-206, Conference Master Resources.

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