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A Note on the Empirical Relationship Between Trade, Growth and the Environment

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  • Lewis R. Gale
  • Jose A. Mendez

Abstract

This note reestimates Grossman and Krueger's (1993) SO2 emissions regression including regressors to capture the effects of scale, trade and trade policy. Several new results are obtained. Increases in economic activity have a negative effect on the environment separate from changes in per capita income, whose relation to the environment is now positive and linear not inverted- U shaped. The trade policy measure is not significant, but its effect is ambiguous a priori. Finally, in line with specialization patterns based on traditional sources of comparative advantage, pollution rises with the capital abundance of a country (since this favors capital-intensive and generally dirtier industries) and falls with increases in labor and land abundance.

Suggested Citation

  • Lewis R. Gale & Jose A. Mendez, "undated". "A Note on the Empirical Relationship Between Trade, Growth and the Environment," Working Papers 96/3, Arizona State University, Department of Economics.
    • Handle: RePEc:wop:astewp:9603
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    File URL: http://www.cob.asu.edu/ecn/papers/WP1997/wp96_3.pdf
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    References listed on IDEAS

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    1. Grossman, Gene, 1993. "Pollution and Growth: What Do We Know?," CEPR Discussion Papers 848, C.E.P.R. Discussion Papers.
    2. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    3. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 755-787.
    4. Goldin,Ian & Winters,L. Alan (ed.), 1995. "The Economics of Sustainable Development," Cambridge Books, Cambridge University Press, number 9780521469579, November.
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    Cited by:

    1. 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.
    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. Brock, William A. & Taylor, M. Scott, 2005. "Economic Growth and the Environment: A Review of Theory and Empirics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 28, pages 1749-1821, Elsevier.

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    More about this item

    Keywords

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    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F1 - International Economics - - Trade

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