Economics at your fingertips  

On the environmental consequences of intra-industry trade

Jayjit Roy ()

Journal of Environmental Economics and Management, 2017, vol. 83, issue C, 50-67

Abstract: In the trade and environment debate, the relevance of examining the impact of a location's intra-industry trade (IIT) on environmental quality cannot be overemphasized, in part, due to the increasing prominence of such trade and the paucity of related empirical evidence. Although existing studies largely indicate overall trade to be pro-environment, the consequences of IIT may differ owing to greater varieties of intermediate and final goods, easier technology diffusion via trade in similar goods, productivity gains from within-sector reallocations, and increased innovation. However, identification of the causal effect is plagued by the potential endogeneity of IIT attributable to crucial unobservables and measurement error. In this light, utilizing an instrumental variables strategy and data on multiple environmental indicators from roughly 200 countries over 2000-2005, we investigate IIT's impact on the environment. To measure IIT, we rely on two indexes of within-industry specialization based on changes in and levels of sector-level trade. Regardless of the indicator of IIT or environmental performance, across several sets of instruments, we mostly find (i) IIT to benefit the environment, (ii) overall trade to be less pro-environment than IIT, and (iii) concerns over endogeneity to be relevant.

Keywords: Intra-industry trade; Environmental quality; Instrumental variables (search for similar items in EconPapers)
JEL-codes: C31 F18 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: On the Environmental Consequences of Intra-Industry Trade (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

More articles in Journal of Environmental Economics and Management from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-10-13
Handle: RePEc:eee:jeeman:v:83:y:2017:i:c:p:50-67