Environmental policy stringency and comparative advantage of environmental sensitive goods: a study of textile exports in G20 countries

Abstract

PurposeTextile, listed as one of the highly environmentally sensitive goods, its trade is susceptible to be influenced by the implementation of stringent environmental policies. This paper aims to investigate the long-run relationship between revealed comparative advantage (RCA) and Environmental Policy Stringency Index (EPSI) for textile exports of G20 countries in panel data setup.Design/methodology/approachApart from trend analysis, the authors have employed Pedroni and Westerlund panel cointegration method and fully modified ordinary least square (FMOLS) method to study the long-run relationship between RCA and EPSI in presence of cross-sectional dependence.FindingsA strong link between trade and environmental stringency is observed for textile in the present study. For G20 countries, slight evidence of the Pollution Haven Hypothesis has also been witnessed in the study. Correspondingly, the results reveal the presence of long-run association between the variables under study, implying that stringent environmental policies reduce RCA for some countries, whereas some countries witness the Porter hypothesis.Research limitations/implicationsThe results imply that policy formulation should not aim at limiting the efforts of connecting RCA to environmental stringency but to set trade policies in a wider framework, considering environmental concerns, as these are inseparable subjects. However, this study also provides relevant real-world implications that can support further research.Practical implicationsThe present study has important implications for textile exporters such as green innovations. The Porter hypothesis can be a beneficial tool for G20 exporters in enhancing their export performance, especially for the ones dealing in environmentally sensitive goods. This study offers relevant policy implications and provides directions for future research on global trade and environment nexus.Originality/valueThis study deals in a debatable area of research that evaluates the interlinkages between environmental stringency and global trade flows in the G20 countries. An important observation of the study is the asymmetrical nature of policy stringency across different countries and its impact on trade. The unavailability of updated data is the limitation of the present study.

Decolourization and Detoxification of Azo Dye, Malachite Green by Pseudomonas monteilii Strain RZT1, a Bacterium Isolated from Textile Wastewater

“…Our results revealed that a substantial decrease of different parameters of plants i.e germination percentage, radical length, various attributes of root development, fresh weight, phytotoxicity, vigor Index, germination index at higher concentrations of textile dyes. Our results are in agreement with some earlier reports which have also demonstrated a same response of plants when irrigated with effluent [30][31][32][33][34]. Suppression of germination can be caused by reduced water intake by seeds with high concentrations of wastewater, which ultimately affects energy-forming compounds [35] total solids and heavy metals [36,37].…”

Environmental stringency and competitive export strengths: a study in context of environmentally sensitive goods in G20

“…Breusch-Pagan LM, Pesaran Scaled LM and Pesaran CD test confirm presence of Cross-Sectional Dependence (CSD) between RCA and EPSI at 1% level of significance (Table 1). Presence of CSD indicates that policies and decisions are interdependent for the G20 nations (Nathaniel et al ., 2021; Mahajan and Majumdar, 2021a; Neves et al ., 2020).…”

Balancing profit and sustainability: Investigating the eco‐innovation strategies of G20 polluting industries

“…Additionally, the G20 provides a unique platform for international cooperation and coordination, with a focus on economic and political issues such as trade, finance, and development (Mahajan & Majumdar, 2023a). By studying the G20, researchers can gain insights into the strategies and policies adopted by these influential economies in response to environmental challenges, technological innovation, and the nexus between growth and the environment.…”

“…This is a key route for the generation of new technologies. However, amount of money that should be spent on research and development has never been settled, and the issue is made even more complex by the fact that the impact of R&D expenditure varies depending on the characteristics of individual companies (He et al, 2022; Mahajan & Majumdar, 2021, 2022). Despite the previous studies, the PH cannot be proved uniformly (Dou & Han, 2019; He et al, 2022).…”