Intra-industry trade and heterogeneity in pollution emission

Julia Swart ()

The Journal of International Trade & Economic Development, 2013, vol. 22, issue 1, 129-156

Abstract: This paper develops a model of intermediate goods firms heterogeneity with respect to a pollution parameter to analyze the effects of intra-industry trade on final good output, pollution and welfare. By focusing on intra-industry trade we consider trade between similar countries. We analyze both trade between developed countries, and trade between developing countries. In our model, final good producers pay an environmental tax on the total pollution emitted in their country. Therefore, final good producers determine the overall level of pollution by demanding 'cleaner' or 'dirtier' intermediate goods. To focus on intra-industry trade we consider only intermediate goods firms trade. We analyze three scenarios: closed economy; open economy with no impediments to trade; and open economy with transportation cost. Our main findings are: i . a developing country closed to trade faces lower final good output and higher total pollution and is thus worse off than a developed country; ii . countries are better off under trade than under autarky, regardless of their development level; and iii . an open economy with low transportation costs are better off than an open economy with no impediments to trade.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1080/09638199.2013.745288 (text/html)
Access to full text is restricted to subscribers.

Related works:
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: https://EconPapers.repec.org/RePEc:taf:jitecd:v:22:y:2013:i:1:p:129-156

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638199.2013.745288

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().