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Does Quality Matter in the Iron and Scrap Trade?

  • Michida, Etsuyo
  • Atici, Cemal
  • Kojima, Michikazu

This paper sheds light on the iron and steel (IS) scrap trade to examine how economic development affects the quality demanded of recyclable resource. A simple model is presented that show a mechanism of how scrap quality impacts the direction of trade due to comparative advantage. We find that economic development in both importing and exporting countries has a positive effect on the quality of traded recyclables. Developed countries that intend to improve the domestic recovery of recyclables should raise the quality of separating recyclables while developing countries should tighten environmental regulations to help decrease the import of recyclables that cause pollution.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/1030/1/ARRIDE_Discussion_No.282_michida.pdf
File Function: First version, 2011
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Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 282.

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Date of creation: Mar 2011
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Publication status: Published in IDE Discussion Paper. No. 282 2011. 3
Handle: RePEc:jet:dpaper:dpaper282
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