Trade-induced technological change: Analyzing economic and environmental outcomes

Shunsuke Managi and Surender Kumar

Economic Modelling, 2009, vol. 26, issue 3, 721-732

Abstract: We analyze how changes in trade openness are related to induced technological innovations that are not only GDP increasing but also pollution saving. Our model includes by-products of carbon dioxide and sulfur dioxide emissions. We estimate a directional distance function for 76 countries over the period 1963-2000 to measure exogenous and trade-induced technological change. On average, we find substantial trade-induced technological progress, and its magnitude is about one third of the overall technological change. The trade-induced technological changes, however, are GDP reducing and pollution increasing. Empirically, we find that increased trade openness correlates to increased pollution.

Keywords: Trade-induced; technological; change; Exogenous; technological; change; Environmental; effects; Total; factor; productivity; Directional; distance; function (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (30)

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