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International Trade and Environmental Regulation: Time Series Evidence and Cross Section Test


  • Xinpeng Xu



This paper examines empiricallywhether more stringent domestic environmental policiesreduce the international competitiveness ofenvironmentally sensitive goods (ESGs). Our timeseries evidence indicates that there are no systematicchanges in trade patterns of ESGs in the last threedecades, despite the introduction of more stringentenvironmental regulations in most of the developedcountries in the 1970s and 1980s. This observedphenomenon is then subjected to a multi-countryeconometric test using an extended gravity-equationframework. The test suggests that, overall, morestringent environmental regulations do not reducetotal exports, exports of ESGs and exports ofnon-resource-based ESGs. Neither was there anyevidence to support the hypothesis that new tradebarriers emerge to offset the effects of morestringent environmental regulations. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Xinpeng Xu, 2000. "International Trade and Environmental Regulation: Time Series Evidence and Cross Section Test," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 17(3), pages 233-257, November.
  • Handle: RePEc:kap:enreec:v:17:y:2000:i:3:p:233-257
    DOI: 10.1023/A:1026428806818

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    References listed on IDEAS

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    Cited by:

    1. Arouri, Mohamed El Hedi & Caporale, Guglielmo Maria & Rault, Christophe & Sova, Robert & Sova, Anamaria, 2012. "Environmental Regulation and Competitiveness: Evidence from Romania," Ecological Economics, Elsevier, vol. 81(C), pages 130-139.
    2. FAÍÑA J.Andrés & LÓPEZ-RODRÍGUEZ Jesus, "undated". "Population Potentials and Development Levels: Empirical Findings in the European Union," EcoMod2003 330700050, EcoMod.
    3. Tsurumi Tetsuya & Managi Shunsuke & Hibiki Akira, 2015. "Do Environmental Regulations Increase Bilateral Trade Flows?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1549-1577, October.
    4. Somlanare Romuald KINDA & Pascale COMBES MOTEL & Jean-Louis COMBES, 2014. "Do Environmental Policies Hurt Trade Performance?," Working Papers 201404, CERDI.
    5. Bassem Kahouli & Anis Omri & Anissa Chaibi, 2014. "Environmental Regulations, Trade, and Foreign Direct Investment: Evidence from Gravity Equations," Working Papers 2014-189, Department of Research, Ipag Business School.
    6. Andrea Mantovani & Mark Vancauteren, 2008. "Environmental Policy and Trade of Manufacturing Goods in the Central and Eastern Enlargement of the European Union," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 44(3), pages 34-47, May.
    7. Colyer, Dale, 2003. "Agriculture and Environmental Issues in Free Trade Agreements," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 4(2).
    8. repec:eee:riibaf:v:42:y:2017:i:c:p:353-364 is not listed on IDEAS
    9. Doganay, Seda Meyveci & Sayek, Selin & Taskin, Fatma, 2014. "Is environmental efficiency trade inducing or trade hindering?," Energy Economics, Elsevier, vol. 44(C), pages 340-349.
    10. repec:spr:ieaple:v:17:y:2017:i:6:d:10.1007_s10784-017-9373-x is not listed on IDEAS
    11. repec:zbw:hohpro:338 is not listed on IDEAS
    12. Elif Akbostanci & G.Ipek Tunç & Serap Türüt-Asik, 2004. "Pollution Haven Hypothesis and the Role of Dirty Industries in Turkey’s Exports," ERC Working Papers 0403, ERC - Economic Research Center, Middle East Technical University, revised Feb 2004.
    13. Azam, Sardor, 2016. "Trade and Environment: Do Spatial Effects Matter?," MPRA Paper 73113, University Library of Munich, Germany, revised Jun 2016.
    14. Busse, Matthias, 2004. "Trade, environmental regulations and the World Trade Organization : new empirical evidence," Policy Research Working Paper Series 3361, The World Bank.
    15. Oliver, Geoffrey & Basak, Rishi, 2004. "Competitiveness and environmental protection: a dirty dilemma," MPRA Paper 58416, University Library of Munich, Germany, revised 19 Feb 2004.
    16. Douglas A. Carr, 2011. "The Intergovernmental Fiscal Effects of the Clean Air Act," Public Finance Review, , vol. 39(6), pages 810-830, November.
    17. repec:old:wpaper:338 is not listed on IDEAS
    18. Zhu, Xueqin & van Ierland, Ekko, 2006. "The enlargement of the European Union: Effects on trade and emissions of greenhouse gases," Ecological Economics, Elsevier, vol. 57(1), pages 1-14, April.
    19. Christoph Böhringer & Victoria Alexeeva-Talebi, 2011. "Unilateral climate policy and competitiveness: The implications of differential emission pricing," Working Papers V-338-11, University of Oldenburg, Department of Economics, revised Jun 2011.
    20. Thomas Roediger-Schluga, 2003. "Some Micro-Evidence on the "Porter Hypothesis" from Austrian VOC Emission Standards," Growth and Change, Wiley Blackwell, vol. 34(3), pages 359-379.


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