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International trade and environmental policy: how effective is 'eco-dumping'?

  • Xu, Xinpeng

The effects of environmental regulations on the international competitiveness of domestic industries have become an increasing concern in the trade liberalisation process in the 1990s. This paper examines the significance of environmental policy for trade. A generalised GNP function, which incorporates both technology changes and increasing returns to scale is set up and a flexible translog function form is used to approximate this generalised GNP function. Seemingly unrelated regression is employed to estimate a system of sectoral share equations derived from the generalised GNP function. The basic hypothesis is that while the environmental factor is not a significant determinant of the international competitiveness of environmentally sensitive industries, technology is. The result supports this hypothesis and suggests that socalled eco-dumping is not an effective strategy in this context.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 17 (2000)
Issue (Month): 1 (January)
Pages: 71-90

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Handle: RePEc:eee:ecmode:v:17:y:2000:i:1:p:71-90
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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  1. Xinpeng Xu, 1998. "Export Performance of Environmentally Sensitive Goods: A Global Perspective?," Asia Pacific Economic Papers 278, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
  2. Diewert, W E, 1974. "Functional Forms for Revenue and Factor Requirements Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 119-30, February.
  3. Drysdale, Peter, 1998. "Japan's approach to Asia Pacific economic cooperation," Journal of Asian Economics, Elsevier, vol. 9(4), pages 547-554.
  4. Ulrich R. Kohli, 1978. "A Gross National Product Function and the Derived Demand for Imports and Supply of Exports," Canadian Journal of Economics, Canadian Economics Association, vol. 11(2), pages 167-82, May.
  5. Mody, Ashoka & Roy, Subhendu & Wheeler, David & Dasgupta, Susmita, 1995. "Environmental regulation and development : a cross-country empirical analysis," Policy Research Working Paper Series 1448, The World Bank.
  6. James R. Markusen, 1996. "Costly Pollution Abatement, Competitiveness, and Plant Location Decisions," NBER Working Papers 5490, National Bureau of Economic Research, Inc.
  7. Harrigan, James, 1997. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model," American Economic Review, American Economic Association, vol. 87(4), pages 475-94, September.
  8. James Brander & M. Scott Taylor, 1997. "International Trade Between Consumer and Conservationist Countries," NBER Working Papers 6006, National Bureau of Economic Research, Inc.
  9. Davies, Stephen W. & McGuinness, Anthony J., 1982. "Dumping at less than marginal cost," Journal of International Economics, Elsevier, vol. 12(1-2), pages 169-182, February.
  10. Schelling, Thomas C, 1992. "Some Economics of Global Warming," American Economic Review, American Economic Association, vol. 82(1), pages 1-14, March.
  11. Tobey, James A, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Wiley Blackwell, vol. 43(2), pages 191-209.
  12. Dean, Judith M., 1992. "Trade and the environment : a survey of the literature," Policy Research Working Paper Series 966, The World Bank.
  13. Rauscher, Michael, 1994. "On Ecological Dumping," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 822-40, Supplemen.
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