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Foreign direct investment, Poverty, Openness, Globalization, F1, O1, I3,

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The standard definition of ecological dumping, the marginal cost of abatement is less than the marginal damage from the pollution, does not catch well the concern of the environmentalists. Comparing environmental quality before and after trade liberalization, this paper uses a partial equilibrium strategic trade framework to show that trade liberalization can improve environmental quality. This result holds under both Cournot and Bertrand competition, and for both partial and complete trade liberalization.