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Shifting of Pollution Loads to Informal Units in India: A Possible Escape Route for Compliance with WTO Standards

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  • Sudeshna Chattopadhyay

    (Sudeshna Chattopadhyay (corresponding author), Assistant Professor, Bidhannagar College, Kolkata, West Bengal, India. E-mail: sudeshna.chattopadhyay@gmail.com)

  • Sarmila Banerjee

    (Sarmila Banerjee, Rajiv Gandhi Chair Professor, University of Calcutta, India. E-mail: sbeco@caluniv.ac.in)

Abstract

This article tries to examine the environmental and social costs imposed on the Indian economy as a result of globalization. It is shown that in the world market, India has strong revealed comparative advantage (RCA) in a number of dirty products. Constant Market Share (CMS) analysis for these products suggests enhanced price competitiveness in the post-liberalization period. However, an estimation of total pollution content of India’s trade vector indicates that though the pollution content increased during early liberalization and globalization period, it has come down in the post-World Trade Organization (WTO) period. Whether this is an outcome of switching to cleaner technology to comply with the stricter environmental and social standards or merely a consequence of shifting pollution load from the formal to the informal sector is our research question.

Suggested Citation

  • Sudeshna Chattopadhyay & Sarmila Banerjee, 2013. "Shifting of Pollution Loads to Informal Units in India: A Possible Escape Route for Compliance with WTO Standards," Foreign Trade Review, , vol. 48(1), pages 23-44, February.
    • Handle: RePEc:sae:fortra:v:48:y:2013:i:1:p:23-44
    DOI: 10.1177/001573251204800102
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    References listed on IDEAS

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    More about this item

    Keywords

    Environmental and social costs; globalization; revealed comparative advantage; constant market share analysis; price competitiveness; pollution content of trade; formal and informal sector linkage; F6; F18; O17;
    All these keywords.

    JEL classification:

    • F6 - International Economics - - Economic Impacts of Globalization
    • F18 - International Economics - - Trade - - - Trade and Environment
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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