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The Environmental Consequences of Trade: Evidence from Subnational Trade Flows

  • Chintrakarn, Pandej

    ()

    (SMU)

  • Millimet, Daniel

    ()

    (SMU)

The debate over the environmental consequences of free trade is not only quite heated, but also entails significant policy ramifications. The empirical difficulty with assessing this relationship is the fact that trade and environmental quality may be jointly determined, making it difficult to infer a causality. Recently, cross-sectional analysis at the country level has made use of exogenous determinants of trade to identify the causal effect of trade on the environment, finding moderate evidence of a beneficial impact of expanded trade on the environmental quality. Given the stakes involved, we revisit this finding using subnational data on ‘trade’ flows across US states and several measures of pollution. Our findings are striking, providing further evidence of the beneficial impact of trade.

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Paper provided by Southern Methodist University, Department of Economics in its series Departmental Working Papers with number 0501.

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Length: 32 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:smu:ecowpa:0501
Contact details of provider: Postal: Department of Economics, P.O. Box 750496, Southern Methodist University, Dallas, TX 75275-0496
Phone: 214-768-2715
Fax: 214-768-1821
Web page: http://www.smu.edu/economics

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  9. Daniel L. Millimet & Thomas Osang, 2007. "Do state borders matter for U.S. intranational trade? The role of history and internal migration," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 93-126, February.
  10. Daniel L. Millimet & John A. List & Thanasis Stengos, 2003. "The Environmental Kuznets Curve: Real Progress or Misspecified Models?," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1038-1047, November.
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