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Trade-induced technological change: Analyzing economic and environmental outcomes

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  • Managi, Shunsuke
  • Kumar, Surender

Abstract

We analyze how changes in trade openness are related to induced technological innovations that are not only GDP increasing but also pollution saving. Our model includes by-products of carbon dioxide and sulfur dioxide emissions. We estimate a directional distance function for 76 countries over the period 1963-2000 to measure exogenous and trade-induced technological change. On average, we find substantial trade-induced technological progress, and its magnitude is about one third of the overall technological change. The trade-induced technological changes, however, are GDP reducing and pollution increasing. Empirically, we find that increased trade openness correlates to increased pollution.

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  • Managi, Shunsuke & Kumar, Surender, 2009. "Trade-induced technological change: Analyzing economic and environmental outcomes," Economic Modelling, Elsevier, vol. 26(3), pages 721-732, May.
    • Handle: RePEc:eee:ecmode:v:26:y:2009:i:3:p:721-732
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    12. Mona Haddad & Ben Shepherd, 2011. "Managing Openness : Trade and Outward-oriented Growth After the Crisis," World Bank Publications - Books, The World Bank Group, number 2283, December.
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    16. Vouldis, Angelos T. & Michaelides, Panayotis G. & Tsionas, Efthymios G., 2010. "Estimating semi-parametric output distance functions with neural-based reduced form equations using LIML," Economic Modelling, Elsevier, vol. 27(3), pages 697-704, May.
    17. Bataka, Hodabalo, 2021. "Globalization and Environmental Pollution in Sub-Saharan Africa," African Journal of Economic Review, African Journal of Economic Review, vol. 9(1), January.
    18. Helen Tammela Naughton, 2010. "Globalization and Emissions in Europe," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 7(2), pages 503-519, December.
    19. Debashis Chakraborty & Sacchidananda Mukherjee, 2013. "Do Foreign Trade and Investment Lead to Higher CO2 Emissions? Evidence from Cross-Country Empirical Estimates," Review of Market Integration, India Development Foundation, vol. 5(3), pages 329-361, December.
    20. Puspaning Buanawaty & Fithra Faisal Hastiadi, 2017. "The Impact of Kyoto Protocol on Environment Quality in the Free Trade Era: Case of G20 Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 36-42.
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    23. Yung-Hsiang Lu & Ku-Hsieh Chen & Jen-Chi Cheng & Chih-Chun Chen & Sian-Yuan Li, 2019. "Analysis of Environmental Productivity on Fossil Fuel Power Plants in the U.S," Sustainability, MDPI, vol. 11(24), pages 1-27, December.
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