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The Impact of International Trade on Environmental Quality: Implications for Law

Pham Ngoc-Tham, Pham Trung-Kien, Cao Viet Hieu, Giang Tran and Xuan Vinh Vo
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Pham Trung-Kien: Faculty of Economics, Binh Duong University, Binh Duong Province590000, Vietnam
Cao Viet Hieu: Binh Duong University, Binh Duong Province 590000, Vietnam

Asian Journal of Law and Economics, 2020, vol. 11, issue 1, 12

Abstract: Our study illuminates the impact of international trade on environmental quality in lower-middle-income countries by using CO2 emission as the proxy for environmental degradation. Using the Pooled Mean Group estimation along with validity tests, the results show that in the long run, CO2 emission is affected by merchandise export, merchandise import, FDI, GDP per capita, and renewable energy consumption. The impact of trade on CO2 emission is mixed because our findings show that merchandise export and import have opposite effects. In addition, our results reveal that Environmental Kuznets Curve exists in the long run with N-sharped. The increase in GDP per capita leads to the raise of CO2 emission at first, but later comes the decrease and then increase. The paper has relevant implications for law makers.

Keywords: CO2 emission; Environmental Kuznets Curve; export; import (search for similar items in EconPapers)
JEL-codes: F18 Q56 (search for similar items in EconPapers)
Date: 2020
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