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Free Trade and Pollution in the Manufacturing Industry in Mexico: A Verification of the Inverse Kuznets Curve at a State Level

Author

Listed:
  • Elena Catalina Jáuregui Nolen
  • José de Jesús Salazar Cantú
  • Raymundo Cruz Rodríguez Guajardo
  • Héctor González García

Abstract

There has been a long debate about the effects that free trade has on pollution. Most empirical analysis on this topic has focused at the national level. The objective of this study is to see if there is a relationship between the pollution generated by the manufacturing industry in each of Mexico’s 32 states and the North American Free Trade Agreement (NAFTA). This was done via panel data regression models using information on pollution, income, and degree of trade from each of the states for the years 1993 and 2000. The pollution index level was constructed using the Industrial Pollution Projection System from the World Bank. In general we found a positive relationship between trade liberalization and pollution caused by manufacturing. Furthermore, we found that income and pollution follow the relationship expressed in the Environmental Kuznets Curve. JEL classification: F18, Q56

Suggested Citation

  • Elena Catalina Jáuregui Nolen & José de Jesús Salazar Cantú & Raymundo Cruz Rodríguez Guajardo & Héctor González García, 2010. "Free Trade and Pollution in the Manufacturing Industry in Mexico: A Verification of the Inverse Kuznets Curve at a State Level," Ensayos Revista de Economía, Universidad Autónoma de Nuevo León, vol. 29(2), pages 99-119, November.
    • Handle: RePEc:ere:journl:v:29:y:2010:i:2:id:84
    DOI: 10.29105/ensayos29.2-4
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    References listed on IDEAS

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    1. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    2. Cole, Matthew A., 2004. "Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages," Ecological Economics, Elsevier, vol. 48(1), pages 71-81, January.
    3. Francisco Rodríguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338, National Bureau of Economic Research, Inc.
    4. repec:umd:umdeco:rodriguez9901 is not listed on IDEAS
    5. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
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    Keywords

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    JEL classification:

    • 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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