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Intra-Industry Trade in Dirty Goods and Environmental Policies

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  • Sen, Anindita

Abstract

In this paper we study the effect of intra-industry trade in an environmental-quality differentiated good on the pollution level in a two-country framework when there are strategic interactions between the firms in the two countries. The pro-competitive effect of intra-industry trade expands the scale of production and, therefore, increases pollution in both the countries. Effect on the strategic choice of environmental qualities of the good is, on the other hand, asymmetric for the two producers. Impact of environmental policies like pollution content production tax and tariff on trade and pollution levels are also studied. .

Suggested Citation

  • Sen, Anindita, 2013. "Intra-Industry Trade in Dirty Goods and Environmental Policies," MPRA Paper 49167, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:49167
    as

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    File URL: https://mpra.ub.uni-muenchen.de/49167/1/MPRA_paper_49167.pdf
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    References listed on IDEAS

    as
    1. Copeland, Brian R. & Taylor, M. Scott, 1999. "Trade, spatial separation, and the environment," Journal of International Economics, Elsevier, vol. 47(1), pages 137-168, February.
    2. Sen, Anindita & Acharyya, Rajat, 2012. "Environmental standard and employment: impact of productivity effect," Environment and Development Economics, Cambridge University Press, vol. 17(02), pages 207-225, April.
    3. Motta, Massimo, 1993. "Endogenous Quality Choice: Price vs. Quantity Competition," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 113-131, June.
    4. Brander, James A., 1981. "Intra-industry trade in identical commodities," Journal of International Economics, Elsevier, vol. 11(1), pages 1-14, February.
    5. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 755-787.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Intra-Industry trade; environmental pollution; environmental standard;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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