Environmental Regulations in Gravity Equations: Evidence from Europe
One implication of the pollution haven hypothesis is that countries export more by applying more lenient environmental regulations. Most studies that apply gravity-type equations do not find robust support for environmental regulations to affect bilateral exports. In this paper, we show that one can obtain robust negative effects of stringency, as long as gravity equations are well specified with respect to theory. Our results, based on the European data, are both very consistent with US studies on environmental regulations and another line of very recent studies that infer non-biased price or substitution elasticities from trade equations. We show that more stringent environmental regulations, when depicting a pure cost effect, are reducing exports. The coefficient is even larger in the case where exporting countries are Central and Eastern European countries, comparing to the EU15. Further, we show that there is no significant difference in the impact of regulations on trade in case of dirty and clean sectors. Finally, when using GMM estimation, our environmental stringency coefficient gets significantly reinforced. Copyright Blackwell Publishing Ltd 2005.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 28 (2005)
Issue (Month): 11 (November)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 |
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0378-5920|
When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:28:y:2005:i:11:p:1591-1615. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.