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Trade and Environment: Do Spatial Effects Matter?

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  • Azam, Sardor

Abstract

This study tests the suitability of spatial effects in trade context. The paper analyzes the effect of the strictness of environmental regulations on trade performance on the basis of augmented gravity model. It compares spatial estimates with those of OLS and concludes that spatial effects are important. The results indicate that Spatial Error Model fits best to the data at hand. It is shown that environmental standards are positively correlated with trade.

Suggested Citation

  • Azam, Sardor, 2016. "Trade and Environment: Do Spatial Effects Matter?," MPRA Paper 73113, University Library of Munich, Germany, revised Jun 2016.
    • Handle: RePEc:pra:mprapa:73113
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    File URL: https://mpra.ub.uni-muenchen.de/73113/1/joaebrjune2016_161_174.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Exports; Augmented gravity model; Environmental Performance Index; Spatial econometrics; Multilateral resistance;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • F18 - International Economics - - Trade - - - Trade and Environment
    • 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

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