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The cleanup of US manufacturing through pollution offshoring

Author

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  • Choi, Jaerim
  • Hyun, Jay
  • Kim, Gueyon
  • Park, Ziho

Abstract

We study the role of offshoring in understanding long-run environmental impacts of trade liberalization and the cleanup of US manufacturing. Leveraging establishment-level pollution emissions and business activity data and a change in US trade policy toward China in the early 2000s, we show that US establishments decrease toxic emissions in response to a reduction in trade policy uncertainty. Emission abatement is mainly driven by a decline in pollution emission intensity. We provide comprehensive evidence that highlights the role of offshoring: US manufacturers, especially those that emit pollutants intensely, source from abroad and establish more subsidiaries in China following the event.

Suggested Citation

  • Choi, Jaerim & Hyun, Jay & Kim, Gueyon & Park, Ziho, 2025. "The cleanup of US manufacturing through pollution offshoring," Journal of International Economics, Elsevier, vol. 154(C).
    • Handle: RePEc:eee:inecon:v:154:y:2025:i:c:s0022199625000029
    DOI: 10.1016/j.jinteco.2025.104046
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    More about this item

    Keywords

    Manufacturing cleanup; Pollution offshoring; Pollution haven; Environmental regulation; Environment and trade;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • 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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