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Trade and environment: further empirical evidence from heterogeneous panels using aggregate data

Author

Listed:
  • Thomas Jobert

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur)

  • Fatih Karanfil

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Anna Tykhonenko

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur)

Abstract

Empirical studies on the trade-environment nexus that use panel data face two simultaneous challenges. One is associated with the potential presence of unobserved cross-country heterogeneity, while the other is due to the use of aggregate data. In this paper, we apply both the dynamic fixed effects and empirical iterative Bayes estimators to show that when country heterogeneity is accurately accounted for in the estimation, it is possible to obtain significant impacts of trade variables on the environment, even though we use aggregate data. Furthermore, using both the parameter estimates and indicators of stringency of environmental regulations, we show that at lower levels of stringency, the probability of having pollution-intensive foreign direct investments increases with a decrease in stringency, but the opposite is true for higher levels of regulatory stringency. This implies that pollution havens may exist only if environmental regulations are very lax or nonexistent.

Suggested Citation

  • Thomas Jobert & Fatih Karanfil & Anna Tykhonenko, 2016. "Trade and environment: further empirical evidence from heterogeneous panels using aggregate data," Working Papers halshs-01295613, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01295613
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    Cited by:

    1. Azam, Muhammad & Khan, Abdul Qayyum, 2016. "Testing the Environmental Kuznets Curve hypothesis: A comparative empirical study for low, lower middle, upper middle and high income countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 63(C), pages 556-567.
    2. Roula Inglesi-Lotz & Jessika Bohlmann, 2014. "Environmental Kuznets curve in South Africa: To confirm or not to confirm?," EcoMod2014 6378, EcoMod.
    3. Fatima Bibi & Muhammad Jamil, 2025. "Trade and environmental quality: a spatial econometric approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(8), pages 18251-18273, August.
    4. Uddin, Mirza Md Moyen & Sharif, Taimur & Islam, Abe Reza Mohammad & Abedin, Mohammad Zoynul, 2024. "Moderating impact of FDI on the growth-environment nexus in the pre-COVID-19 eras," Research in International Business and Finance, Elsevier, vol. 67(PA).
    5. Taimur Sharif & Mirza Md Moyen Uddin & Constantinos Alexiou, 2025. "Testing the moderating role of trade openness on the environmental Kuznets curve hypothesis: a novel approach," Annals of Operations Research, Springer, vol. 345(2), pages 597-635, February.

    More about this item

    Keywords

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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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