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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.

Suggested Citation

  • Tetsuya, Tsurumi & Shunsuke, Managi, 2011. "The Effect of Trade Openness on Deforestation: Empirical Analysis for 142 Countries," MPRA Paper 35805, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:35805
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    References listed on IDEAS

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    1. Arcand, Jean-Louis & Guillaumont, Patrick & Jeanneney, Sylviane Guillaumont, 2008. "Deforestation and the real exchange rate," Journal of Development Economics, Elsevier, vol. 86(2), pages 242-262, June.
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    11. World Bank, 2010. "World Development Report 2010," World Bank Publications, The World Bank, number 4387, April.
    12. Cropper, Maureen & Griffiths, Charles, 1994. "The Interaction of Population Growth and Environmental Quality," American Economic Review, American Economic Association, vol. 84(2), pages 250-254, May.
    13. Tetsuya Tsurumi & Shunsuke Managi, 2010. "Decomposition of the environmental Kuznets curve: scale, technique, and composition effects," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 11(1), pages 19-36, February.
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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.
    2. Jue Yang & Shunsuke Managi & Masayuki Sato, 2015. "The effect of institutional quality on national wealth: an examination using multiple imputation method," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(3), pages 431-453, July.
    3. repec:eee:rensus:v:77:y:2017:i:c:p:731-747 is not listed on IDEAS
    4. Satoshi Honma, 2015. "Does international trade improve environmental efficiency? An application of a super slacks-based measure of efficiency," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 4(1), pages 1-12, December.
    5. repec:eee:jeeman:v:83:y:2017:i:c:p:50-67 is not listed on IDEAS
    6. repec:spr:envpol:v:20:y:2018:i:1:d:10.1007_s10018-017-0189-2 is not listed on IDEAS
    7. Shigemi Kagawa & Seiji Hashimoto & Shunsuke Managi, 2015. "Special issue: studies on industrial ecology," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(3), pages 361-368, July.
    8. You, Wan-Hai & Zhu, Hui-Ming & Yu, Keming & Peng, Cheng, 2015. "Democracy, Financial Openness, and Global Carbon Dioxide Emissions: Heterogeneity Across Existing Emission Levels," World Development, Elsevier, vol. 66(C), pages 189-207.
    9. Roy, Jayjit, 2017. "On the environmental consequences of intra-industry trade," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 50-67.
    10. Joachim Binam & Frank Place & Antoine Kalinganire & Sigue Hamade & Moussa Boureima & Abasse Tougiani & Joseph Dakouo & Bayo Mounkoro & Sanogo Diaminatou & Marcel Badji & Mouhamadou Diop & Andre Babou , 2015. "Effects of farmer managed natural regeneration on livelihoods in semi-arid West Africa," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(4), pages 543-575, October.

    More about this item

    Keywords

    Trade Openness; Environment; Comparative Advantage; Deforestation;

    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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