Intra-Industry Trade in Dirty Goods and Environmental Policies

Anindita Sen

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we study the effect of intra-industry trade in an environmental-quality differentiated good on the pollution level in a two-country framework when there are strategic interactions between the firms in the two countries. The pro-competitive effect of intra-industry trade expands the scale of production and, therefore, increases pollution in both the countries. Effect on the strategic choice of environmental qualities of the good is, on the other hand, asymmetric for the two producers. Impact of environmental policies like pollution content production tax and tariff on trade and pollution levels are also studied. .

Keywords: Intra-Industry trade; environmental pollution; environmental standard (search for similar items in EconPapers)
JEL-codes: F18 Q00 (search for similar items in EconPapers)
Date: 2013-06-15
New Economics Papers: this item is included in nep-agr, nep-env, nep-int and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:49167

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