Impacts of Environmental Policies on Global Green Trade

Sung Jin Kang and Sun Lee
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Sung Jin Kang: Department of Economics, Korea University, Seoul 02841, Korea
Sun Lee: Department of Economics, Korea University, Seoul 02841, Korea

Sustainability, 2021, vol. 13, issue 3, 1-15

Abstract: The objective of this study was to investigate the impact of environmental policies on bilateral green exports among developed and developing countries. The empirical analysis was based on the fixed-effects gravity model estimation with the PPML (Poisson pseudo-maximum likelihood) for bilateral green trade of world countries for 1990–2019. This study focused on two proxy environmental policy indicators: environment-related tax and energy intensity. The major findings were that, first, promotion of environment-related tax increases green exports among HIC (high-income countries) and, second, an increase in the green trade of a country depends on the energy intensity level of its trading partner countries in order to stabilize domestic demand and production. This result is shown to be significant and consistent within the trade between the same income groups. Thus, supporting the green growth strategy, empirical results suggest that LMY (low- and middle-income) countries have to promote environmental policies and green production processes to be competitive in the global market.

Keywords: green industry; green growth; gravity model; environmental tax (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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