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Trade, economic growth and environment

Author

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  • Managi, Shunsuke
Abstract
The literature on trade openness, economic development, and the environment is largely inconclusive about the environmental consequences of trade. This study review previous studies focusing on treating trade and income as endogenous and estimating the overall impact of trade openness on environmental quality using the instrumental variables technique. The results show that whether or not trade has a beneficial effect on the environment varies depending on the pollutant and the country. Trade is found to benefit the environment in OECD countries. It has detrimental effects, however, on sulfur dioxide (SO2) and carbon dioxide (CO2) emissions in non-OECD countries, although it does lower biochemical oxygen demand (BOD) emissions in these countries. The results also find the impact is large in the long term, after the dynamic adjustment process, although it is small in the short term.

Suggested Citation

  • Managi, Shunsuke, 2012. "Trade, economic growth and environment," IDE Discussion Papers 342, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper342
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Developed countries; Developing countries; International trade; Environmental problems; Economic development; Trade; Environment;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F18 - International Economics - - Trade - - - Trade and Environment
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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