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An Empirical Multi-country Analysis of the Impact of Environmental Regulations on Foreign Trade Flows

Cees van Beers and Jeroen van den Bergh

Kyklos, 1997, vol. 50, issue 1, 29-46

Abstract: In this paper, it is argued that the inconclusiveness in previous empirical studies on the relationship between antipollution standards and foreign trade is due to inaccurate variables used to represent environmental regulations strictness. Two variables of environmental policy stringency are composed and evaluated against the polluter pays principle. In the framework of a trade flow equation, it is found that, with an environmental policy strictness variable closely connected to the polluter pays principle, the impact of stricter regulations on export and import flows is negative. This result implies the existence of government actions to impede imports. Copyright 1997 by WWZ and Helbing & Lichtenhahn Verlag AG

Date: 1997
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Handle: RePEc:bla:kyklos:v:50:y:1997:i:1:p:29-46