Environmental Degradation as an Incentive for Trade

Lawrence Leger

Review of International Economics, 1995, vol. 3, issue 3, 307-18

Abstract: A modified Heckscher-Ohlin-Samuelson model is used in which industries are allocated by historical accident to geographical regions and agents care about their environment. Incentives for international trade arise when economies with identical factor endowments and geophysical characteristics differ in the allocation of industries to regions, and economies will tend to export goods produced in regions with higher environmental assimilative capacity. Copyright 1995 by Blackwell Publishing Ltd.

Date: 1995
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