Environmental Impact of Customs Union Agreement with EU on Turkey’s Trade in Manufacturing Industry

Elif Akbostanci (), G. Ipek Tunc () and Serap Turut-Asik
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Elif Akbostanci: Department of Economics, METU
G. Ipek Tunc: Department of Economics, METU
Serap Turut-Asik: Department of Economics, METU

No 603, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: In this study, we analyze Turkey’s manufacturing industry trade by estimating sectoral import and export demand equations for 1980-2000. The study aims to understand whether the trade in the manufacturing industry complies with pollution haven hypothesis, and whether the free trade environment provided by the customs union (CU) agreement altered the trade pattern of the clean and dirty industries. Results of our econometric models have shown that while CU positively affects the import demand, it does not have any significant impact on the export demand of Turkish manufacturing industry. In terms of the environmental impact, distinction between clean and dirty industries turns out to be significant for both import and export demand. In general, our findings suggest that both clean and dirty industries’ import demand increase during the study period. In terms of export demand, clean industries’ export demand declines whereas dirty industries’ export demand increases compared to the total demand.

Keywords: Environmental impact analysis; EU; Turkey; manufacturing industry (search for similar items in EconPapers)
Pages: 25 pages
Date: 2006-03, Revised 2006-03
New Economics Papers: this item is included in nep-cwa, nep-env and nep-int
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http://erc.metu.edu.tr/en/system/files/menu/series06/0603.pdf First version, 2006 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:met:wpaper:0603

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