The Environmental Consequences of Trade: Evidence from Subnational Trade Flows

Pandej Chintrakarn () and Daniel L. Millimet ()
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Pandej Chintrakarn: SMU

No 501, Departmental Working Papers from Southern Methodist University, Department of Economics

Abstract: The debate over the environmental consequences of free trade is not only quite heated, but also entails significant policy ramifications. The empirical difficulty with assessing this relationship is the fact that trade and environmental quality may be jointly determined, making it difficult to infer a causality. Recently, cross-sectional analysis at the country level has made use of exogenous determinants of trade to identify the causal effect of trade on the environment, finding moderate evidence of a beneficial impact of expanded trade on the environmental quality. Given the stakes involved, we revisit this finding using subnational data on ‘trade’ flows across US states and several measures of pollution. Our findings are striking, providing further evidence of the beneficial impact of trade.

Keywords: Bilateral Trade; Environmental Quality; Pollution Haven Hypothesis (search for similar items in EconPapers)
JEL-codes: F18 Q25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env and nep-int
Date: 2005-10
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Related works:
Journal Article: The environmental consequences of trade: Evidence from subnational trade flows (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:smu:ecowpa:0501

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