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The Environmental Consequences of Trade: Evidence from Subnational Trade Flows

Author

Listed:
  • Chintrakarn, Pandej

    (SMU)

  • Millimet, Daniel

    (SMU)

Abstract
The debate over the environmental consequences of free trade is not only quite heated, but also entails significant policy ramifications. The empirical difficulty with assessing this relationship is the fact that trade and environmental quality may be jointly determined, making it difficult to infer a causality. Recently, cross-sectional analysis at the country level has made use of exogenous determinants of trade to identify the causal effect of trade on the environment, finding moderate evidence of a beneficial impact of expanded trade on the environmental quality. Given the stakes involved, we revisit this finding using subnational data on ‘trade’ flows across US states and several measures of pollution. Our findings are striking, providing further evidence of the beneficial impact of trade.

Suggested Citation

  • Chintrakarn, Pandej & Millimet, Daniel, 2005. "The Environmental Consequences of Trade: Evidence from Subnational Trade Flows," Departmental Working Papers 0501, Southern Methodist University, Department of Economics.
    • Handle: RePEc:smu:ecowpa:0501
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Bilateral Trade; Environmental Quality; Pollution Haven Hypothesis;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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