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Globalization and Pollution Industries in East Asia


  • Toru Iwami

    (Faculty of Economics, University of Tokyo)


In this paper, we investigate what the East Asian data tell us about the "pollution haven hypothesis." In the region, pollution goods are not traded so much directly, and their production is not clearly correlated with inward FDI and openness of the country in question. Although production of pollution goods is indirectly related to manufacturing exports as materials and intermediate goods, domestic consumption exerts larger impact on the production than exports. These facts imply that pollution industries are not so much influenced by the "globalization," suggesting indirectly also that a gap in environmental regulations do not lead to an increased scale of foreign trade and FDI. To the question of how FDI inflows and openness contribute to energy efficiency and labor productivity, we find a positive effect of FDI on the labor productivity in low and middle-income countries, although its effect on energy efficiency is rather vague.

Suggested Citation

  • Toru Iwami, 2006. "Globalization and Pollution Industries in East Asia," CIRJE F-Series CIRJE-F-394, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2006cf394

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    References listed on IDEAS

    1. Fukao, Kyoji & Ishido, Hikari & Ito, Keiko, 2003. "Vertical intra-industry trade and foreign direct investment in East Asia," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 468-506, December.
    2. Suri, Vivek & Chapman, Duane, 1998. "Economic growth, trade and energy: implications for the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 25(2), pages 195-208, May.
    3. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
    4. Brian R. Copeland & M. Scott Taylor, 2004. "Trade, Growth, and the Environment," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 7-71, March.
    5. Jagdish N. Bhagwati, 2004. "In Defense of Globalization: It Has a Human Face," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 9-20, November-.
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