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Impact of Trade Liberalization on the Environment in Developing Countries: The Case of Nigeria

  • Feridun, Mete
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    This article aims at investigating the impact of trade openness on pollution and resource depletion in Nigeria. Results indicate that pollution is positively related to trade intensity and real GDP per square kilometer, while capital to labor ratio and GNP are negatively related to pollution. In addition, strong evidence suggests that trade intensity, real GDP per square kilometer and GNP are positively related to environmental degradation indicating that the technique, scale, and total effects of liberalization are detrimental to the environment. The composition effect of trade liberalization on natural resource utilization,on the other hand, is beneficial. A number of policy implications emerge from the study for Nigeria as well as other developing economies.

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    File URL: http://mpra.ub.uni-muenchen.de/731/1/MPRA_paper_731.pdf
    File Function: original version
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 731.

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    Date of creation: 08 Nov 2006
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    Publication status: Published in Journal of Developing Societies 1.22(2006): pp. 39-56
    Handle: RePEc:pra:mprapa:731
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    1. Lopez Ramon, 1994. "The Environment as a Factor of Production: The Effects of Economic Growth and Trade Liberalization," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 163-184, September.
    2. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
    3. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.
    4. Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 2005. "Trade Liberalization and the Environment in the Pacific Basin: Coordinated Approaches to Mexican Trade and Environment Policy," Staff General Research Papers 12742, Iowa State University, Department of Economics.
    5. Shafik, Nemat & Bandyopadhyay, Sushenjit, 1992. "Economic growth and environmental quality : time series and cross-country evidence," Policy Research Working Paper Series 904, The World Bank.
    6. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
    7. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
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