Exporting and environmental performance: Where you export matters

Juan Blyde and Mayra A. Ramirez

The Journal of International Trade & Economic Development, 2022, vol. 31, issue 5, 672-691

Abstract: Empirical analyses that rely on micro-level panel data have found that exporters are generally less pollutant than non-exporters. While alternative explanations have been proposed, firm-level data has not been used to examine the role of destination markets behind the relationship between exports and pollution. In this paper, we argue that because consumers in high-income countries have higher valuations for clean environments than consumers in developing countries, exporters targeting high-income countries are more likely to improve their environmental outcomes than exporters targeting destinations where valuations for the environment are not high. Using a panel of firm-level data from Chile we find support to this hypothesis. A 10 percentage point increase in the share of exports to high-income countries is associated with a reduction in CO2 pollution intensity of about 16%. The results have important implications for firms in developing countries aiming to target high-income markets.

Date: 2022
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Working Paper: Exporting and Environmental Performance: Where You Export Matters (2022)
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DOI: 10.1080/09638199.2021.2003424

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