The effect of trade openness on deforestation: empirical analysis for 142 countries

Abstract

This study explores the effect of trade openness on deforestation. Previous studies do not find a clear effect of trade openness on deforestation. We use updated data on the annual rate of deforestation for 142 countries from 1990 to 2003, treat trade and income as endogenous, and take into consideration an adjustment process by applying a dynamic model. We find that an increase in trade openness increases deforestation for non-OECD countries while slowing down deforestation for OECD countries. There is a possibility that both capital-labor and environmental-regulation effects have a negative impact on deforestation in developing countries, whereas the opposite holds in developed countries.

The Effects of International Trade on Water Use

“…As they treated income and trade openness as exogenous, however, the ordinary least squares estimator may have led to biased and inconsistent results; hence, the overall impact of trade and income on water use remains inconclusive. Using an analytical framework to deal with the endogeneity problem [ 14 ], [ 15 ], we analyze the causal effects of trade openness on water withdrawal or consumption.…”

The effect of institutional quality on national wealth: an examination using multiple imputation method

“…The between-round variance (denoted by S) is defined as follows: (4) The total variance of θ is then equal to Our research group has been working on conducting a database named World Resource Table using MI for a long time (Managi et al 2009;Tsurumi and Managi 2012). In this paper, we developed the database by including approximately 27 variables and 5859 observations for 189 countries that cover the period from 1980 to 2010.…”

Economic growth and environment in the United Kingdom: robust evidence using more than 250 years data

“…Their results suggest that while trade is beneficial for the environment in OECD countries, it has adverse effects in non-OECD countries. In the same way, Tsurumi and Managi (2012) examine the effect of trade intensity on deforestation for a panel of 142 countries over the period 1990-2003. Their results show that higher trade openness reduces deforestation for OECD countries but not for non-OECD countries, and suggest that both environmental-regulation and capital-labor effects have a positive impact on deforestation in OECD countries but a negative impact in non-OECD countries.…”