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

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  • Xinpeng Xu

Abstract

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

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  • 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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    Cited by:

    1. Azam, Sardor, 2016. "Trade and Environment: Do Spatial Effects Matter?," MPRA Paper 73113, University Library of Munich, Germany, revised Jun 2016.
    2. Andres Faiña & Jesus Lopez-Rodríguez, 2003. "Population Potentials and Development Levels: Empirical Findings in the European Union," ERSA conference papers ersa03p30, European Regional Science Association.
    3. Busse, Matthias, 2004. "Trade, environmental regulations and the World Trade Organization : new empirical evidence," Policy Research Working Paper Series 3361, The World Bank.
    4. 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.
    5. Juan J. Martínez Hernández & Patricia S. Sánchez‐Medina & René Díaz‐Pichardo, 2021. "Business‐oriented environmental regulation: Measurement and implications for environmental policy and business strategy from a sustainable development perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 507-521, January.
    6. Somlanare Romuald KINDA & Pascale COMBES MOTEL & Jean-Louis COMBES, 2014. "Do Environmental Policies Hurt Trade Performance?," Working Papers 201404, CERDI.
    7. Oliver, Geoffrey & Basak, Rishi, 2004. "Competitiveness and environmental protection: a dirty dilemma," MPRA Paper 58416, University Library of Munich, Germany, revised 19 Feb 2004.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. Eduardo Ortas & Isabel Gallego‐Alvarez & Igor Álvarez Etxeberria, 2015. "Financial Factors Influencing the Quality of Corporate Social Responsibility and Environmental Management Disclosure: A Quantile Regression Approach," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(6), pages 362-380, November.
    13. 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, August.
    14. Douglas A. Carr, 2011. "The Intergovernmental Fiscal Effects of the Clean Air Act," Public Finance Review, , vol. 39(6), pages 810-830, November.
    15. Alassane D. Yeo & Aimin Deng, 2019. "The trade policy effect in international trade: case of Pakistan," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-17, December.
    16. repec:old:wpaper:338 is not listed on IDEAS
    17. 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), pages 1-21.
    18. Kahouli, Bassem & Omri, Anis, 2017. "Foreign direct investment, foreign trade and environment: New evidence from simultaneous-equation system of gravity models," Research in International Business and Finance, Elsevier, vol. 42(C), pages 353-364.
    19. Brusselaers, Jan & Buysse, Jeroen, 2018. "Implementation of the EU-Cameroon Voluntary Partnership Agreement policy: Trade distortion, rent-seeking and anticipative behavior," Forest Policy and Economics, Elsevier, vol. 90(C), pages 167-179.
    20. 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.
    21. Kendall Houghton & Helen Naughton, 2017. "Trade and sustainability: the impact of the International Tropical Timber Agreements on exports," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(6), pages 755-778, December.
    22. repec:zbw:hohpro:338 is not listed on IDEAS
    23. Dong-Fang Wang & Qian-Li Dong & Zhi-Min Peng & Syed Abdul Rehman Khan & Arthur Tarasov, 2018. "The Green Logistics Impact on International Trade: Evidence from Developed and Developing Countries," Sustainability, MDPI, vol. 10(7), pages 1-19, June.
    24. Fozia Latif Gill & K Kuperan Viswanathan & Mohd Zaini Abdul Karim, 2018. "The Critical Review of the Pollution Haven Hypothesis (PHH)," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 167-174.
    25. 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.

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