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The effect of trade openness on deforestation: empirical analysis for 142 countries

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  • Tetsuya Tsurumi
  • Shunsuke Managi

Abstract

This study explores the effect of trade openness on deforestation. Previous studies do not find a clear effect of trade openness on deforestation. We use updated data on the annual rate of deforestation for 142 countries from 1990 to 2003, treat trade and income as endogenous, and take into consideration an adjustment process by applying a dynamic model. We find that an increase in trade openness increases deforestation for non-OECD countries while slowing down deforestation for OECD countries. There is a possibility that both capital–labor and environmental-regulation effects have a negative impact on deforestation in developing countries, whereas the opposite holds in developed countries. Copyright Springer Japan 2014

Suggested Citation

  • Tetsuya Tsurumi & Shunsuke Managi, 2014. "The effect of trade openness on deforestation: empirical analysis for 142 countries," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(4), pages 305-324, October.
    • Handle: RePEc:spr:envpol:v:16:y:2014:i:4:p:305-324
    DOI: 10.1007/s10018-012-0051-5
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    More about this item

    Keywords

    Trade openness; Environment; Comparative advantage; Deforestation; Q23; Q56; Q58;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • F10 - International Economics - - Trade - - - General

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