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Is the road to regional integration paved with pollution convergence?

Author

Listed:
  • Leila Baghdadi

    () (LIM-MES Polytechnic School of Tunisia, University of Carthage, Tunisia)

  • Inmaculada Martínez-Zarzoso

    () (Georg-August University of Göttingen and Universitat Jaume I)

  • Celestino Suárez-Burguet

    () (Universitat Jaume I, Department of Economics, Castellón, Spain)

  • Habib Zitouna

    () (LIM-MES Polytechnic School of Tunisia, University of Carthage Tunisia)

Abstract

This paper evaluates the impact of free trade agreements (FTAs) on carbon dioxide emissions convergence for a cross-section of 182 countries over the period 1980 to 2008, paying particular attention to Mediterranean and European Union countries. In order to overcome the endogeneity problem of the FTA variable, a propensity score matching approach is first used to match country pairs. Next the convergence properties of relative CO2 emissions are examined for the whole panel and for the matched sample using difference-in-difference techniques. The main results indicate that CO2 emissions of the pairs of countries that belong to an FTA tend to converge, and do so at a higher rate for more advanced integration agreements. In particular, we find that emissions converge more rapidly for NAFTA and EU-27 countries than for Euro-Med countries.

Suggested Citation

  • Leila Baghdadi & Inmaculada Martínez-Zarzoso & Celestino Suárez-Burguet & Habib Zitouna, 2012. "Is the road to regional integration paved with pollution convergence?," Working Papers 2012/03, Economics Department, Universitat Jaume I, Castellón (Spain).
  • Handle: RePEc:jau:wpaper:2012/03
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    File URL: http://www.doctreballeco.uji.es/wpficheros/baghdadietal2012.pdf
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    References listed on IDEAS

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    1. Olivier Bertrand & Habib Zitouna, 2008. "Domestic versus cross-border acquisitions: which impact on the target firms' performance?," Applied Economics, Taylor & Francis Journals, vol. 40(17), pages 2221-2238.
    2. Martínez-Zarzoso, Inmaculada & Maruotti, Antonello, 2011. "The impact of urbanization on CO2 emissions: Evidence from developing countries," Ecological Economics, Elsevier, vol. 70(7), pages 1344-1353, May.
    3. Sami Bensassi & Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso, 2012. "Economic Integration and the Two Margins of Trade: The Impact of the Barcelona Process on North African Countries' Exports," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(2), pages 228-265, March.
    4. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    5. Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November.
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    7. Jakob, Michael & Haller, Markus & Marschinski, Robert, 2012. "Will history repeat itself? Economic convergence and convergence in energy use patterns," Energy Economics, Elsevier, vol. 34(1), pages 95-104.
    8. Managi, Shunsuke & Hibiki, Akira & Tsurumi, Tetsuya, 2009. "Does trade openness improve environmental quality?," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 346-363, November.
    9. Egger, Hartmut & Egger, Peter & Greenaway, David, 2008. "The trade structure effects of endogenous regional trade agreements," Journal of International Economics, Elsevier, vol. 74(2), pages 278-298, March.
    10. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
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    Citations

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    Cited by:

    1. Debashis Chakraborty & Sacchidananda Mukherjee, 2013. "Do Trade and Investment Flows Lead to Higher CO2 Emissions? Some Panel Estimation Results," Working Papers 1321, Indian Institute of Foreign Trade.

    More about this item

    Keywords

    Pollution haven hypothesis; convergence; CO2 emissions; Euro-med Agreements; difference-in-difference.;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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