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Globalization and Dirty Industries: Do Pollution Havens Matter?

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  • de Melo, Jaime
  • Grether, Jean-Marie

Abstract

This Paper reviews arguments and evidence on the impact of globalization on the environment, then presents evidence on production and international trade flows in five heavily polluting industries for 52 countries over the period 1981-98. A new decomposition of revealed comparative advantage (RCA) according to geographical origin reveals a delocalization to the South for all heavily polluting industries except non-ferrous metals that exhibits South-North delocalization in accordance with factor-abundance driven response to a reduction in trade barriers. Panel estimation of a gravity model of bilateral trade on the same data set reveals that, on average, polluting industries have higher barriers-to-trade costs (except non-ferrous metals with significantly lower barriers to trade) and little evidence of delocalization in response to a North-South regulatory gap.

Suggested Citation

  • de Melo, Jaime & Grether, Jean-Marie, 2003. "Globalization and Dirty Industries: Do Pollution Havens Matter?," CEPR Discussion Papers 3932, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3932
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ariane Manuela Amin, 2012. "What Drives Biodiversity Conservation Effort in the Developing World? An analysis for Sub-Saharan Africa," Working Papers halshs-00722081, HAL.
    2. 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.
    3. David Romo Murillo, 2007. "Competitividad y medio ambiente: la construcción de patrones exportadores sustentables en América Latina," Revista de Economía y Estadística, Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas, vol. 0(1), pages 109-147, January.
    4. de Melo, Jaime & Grether, Jean-Marie & Mathys, Nicole Andréa, 2007. "Trade, Technique and Composition Effects: What is Behind the Fall in World-wide SO2 Emissions, 1990-2000?," CEPR Discussion Papers 6522, C.E.P.R. Discussion Papers.
    5. Houssem Eddine Chebbi & Marcelo Olarreaga & Habib Zitouna, 2011. "Trade Openness Andco2emissions In Tunisia," Middle East Development Journal (MEDJ), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 29-53.
    6. Jean-Marie Grether & Nicole Andréa Mathys & Jaime de Melo, 2015. "Unravelling the Worldwide Pollution Haven Effect," World Scientific Book Chapters,in: Developing Countries in the World Economy, chapter 23, pages 581-612 World Scientific Publishing Co. Pte. Ltd..
    7. Trotignon, Jérôme, 2010. "La Restriction des émissions de CO2 pénalise-t-elle les exportations? Un modèle de gravité avec données de panel et variables muettes régionales," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(1), pages 5-33, mars.
    8. Somlanare Romuald KINDA & Pascale COMBES MOTEL & Jean-Louis COMBES, 2014. "Do Environmental Policies Hurt Trade Performance?," Working Papers 201404, CERDI.
    9. Naghavi, Alireza, 2010. "Trade sanctions and green trade liberalization," Environment and Development Economics, Cambridge University Press, vol. 15(04), pages 379-394, August.
    10. repec:eee:proeco:v:196:y:2018:i:c:p:346-355 is not listed on IDEAS
    11. Simone Borghesi & Giorgia Giovannetti & Gianluca Iannucci & Paolo Russu, 2016. "The dynamics of foreign direct investments in land and pollution accumulation," SEEDS Working Papers 1116, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Nov 2016.
    12. Jean-Marie Grether & Nicole Mathys & Jaime Melo, 2010. "Global manufacturing SO 2 emissions: does trade matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(4), pages 713-729, January.
    13. 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.
    14. Valeria Costantini & Francesco Crespi, 2013. "Public policies for a sustainable energy sector: regulation, diversity and fostering of innovation," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 401-429, April.
    15. Busse, Matthias, 2004. "Trade, environmental regulations and the World Trade Organization : new empirical evidence," Policy Research Working Paper Series 3361, The World Bank.
    16. Alireza Naghavi, 2005. "Multilateral Environmental Agreements and Trade Obligations: A Theoretical Analysis of the Doha Proposal," Working Papers 2005.52, Fondazione Eni Enrico Mattei.
    17. Jerneja Jug & Daniel Mirza, 2005. "Environmental Regulations in Gravity Equations: Evidence from Europe," The World Economy, Wiley Blackwell, vol. 28(11), pages 1591-1615, November.
    18. Sawhney, Aparna & Majumder, Piyali, 2015. "Is India becoming a waste haven of metal scrap?," MPRA Paper 67186, University Library of Munich, Germany.
    19. Giorgia Giovannetti & Elisa Ticci, 2013. "Foreign Direct Investment in Sub-Saharan Africa: Drivers and the Challenge of the Land-Energy Nexus," Working Papers - Economics wp2013_09.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    20. Costantini, Valeria & Crespi, Francesco, 2008. "Environmental regulation and the export dynamics of energy technologies," Ecological Economics, Elsevier, vol. 66(2-3), pages 447-460, June.
    21. Ulrich Wagner & Christopher Timmins, 2009. "Agglomeration Effects in Foreign Direct Investment and the Pollution Haven Hypothesis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(2), pages 231-256, June.
    22. repec:eee:eneeco:v:69:y:2018:i:c:p:71-78 is not listed on IDEAS
    23. Naghavi, Alireza, 2007. "Can R&D-inducing green tariffs replace international environmental regulations?," Resource and Energy Economics, Elsevier, vol. 29(4), pages 284-299, November.
    24. Jérôme Trotignon, 2010. "La restriction des émissions de CO2 pénalise-t-elle les exportations ? Un modèle de gravité avec données de panel et variables muettes régionales," Post-Print halshs-00477244, HAL.

    More about this item

    Keywords

    gravity model; revealed comparative advantage; trade and the environment;

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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