Environmental Standards and Trade Volume

Mangee, Nicholas; Elmslie, Bruce

doi:10.4236/me.2010.12010

Cited by 8 publications

(3 citation statements)

References 17 publications

(42 reference statements)

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“…McAusland (2008) also observed that stringent environmental policies promote exports rather than hindering them. Mangee and Elmslie (2010) examined the effects of environmental regulations on bilateral trade in 39 countries (inclusive of G20). By employing "the Factor Proportions Model", it was noted that differences in environmental standards have a weak but positive effect on trade volume.…”

Section: Environmental Stringency and Trade In G20mentioning

confidence: 99%

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

Mahajan

Majumdar

2021

BIJ

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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.

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Section: Environmental Stringency and Trade In G20mentioning

confidence: 99%

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

Mahajan

Majumdar

2021

BIJ

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“…This hypothesis argues that low income countries will have more pollution after an FTA due to having lenient environmental standards [24][25][26]. For instance, pollution intensive industries will deliberately migrate to areas of lax environmental standards [27]. On the other hand, some argue that low income countries have more labor-intensive goods that are more unhygienic than capital-intensive goods [25].…”

Section: Introductionmentioning

confidence: 99%

Free Trade Agreements and Environment for Sustainable Development: A Gravity Model Analysis

Yao

Yasmeen

et al. 2019

Sustainability

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Free trade agreements (FTAs) have a key role in the global value chain. In the meantime, these are also disturbing the environmental balance of the world. The objective of this study is to check whether the trade is good or bad for the environments of countries that are bonded by trade agreements. This study examines the impact of FTAs on bilateral carbon emissions within the gravity framework. We find a positive impact of FTA agreements on bilateral CO2 pollution. However, in an income-based country group analysis, we find mixed evidence regarding FTAs. The analysis concerning high income countries indicates that free trade agreements are beneficial for high income countries, while, in the case of upper middle income and lower middle income countries, we find that the free trade agreements are not beneficial for their environments. These results of the effects of FTAs on bilateral CO2 pollution imply that low income countries have a greater pollution effect even after the implementation of an FTA due to lenient environmental standards. There is a need for developing countries to learn from high income countries, as their FTAs are beneficial for decreasing pollution.

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“…These include the Leontief input–output model, DEA model, HOV model, Gravity model, and VAR model. 12,13,15,21,24–29 Some methods such as Leontief input–output model and DEA model cannot measure the dynamic impact of environmental tax policies on export trade. 30 Although the Gravity model and VAR model can measure the dynamic impact of environmental regulation policies, the relationship between environmental taxes and export trade cannot be investigated in a complete macroeconomic framework.…”

Section: Introductionmentioning

confidence: 99%

Dynamic effect of environmental tax on export trade: Based on DSGE mode

Gao

Yao

Wang

et al. 2019

Energy & Environment

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We develop a Dynamic Stochastic General Equilibrium (DSGE) model with four sectors, including households, production, government, and export. The model is used to assess the response of China’s export trade to environmental tax shocks. The model parameters are obtained through a combination of calibration and Bayesian estimation. Using the impulse response analysis and variance decomposition, we find that environmental tax shocks can drive the reduction of export volume in China. However, the effect of the environmental tax shocks is smaller than export price mark-up rate shocks. These findings yield important implications for reasonably designing and choosing environmental tax rate and export trade policies.

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Environmental Standards and Trade Volume

Cited by 8 publications

References 17 publications

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

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

Free Trade Agreements and Environment for Sustainable Development: A Gravity Model Analysis

Dynamic effect of environmental tax on export trade: Based on DSGE mode

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