Working Paper: NBER ID: w9776
Authors: Jean-Marie Grether; Jaime de Melo
Abstract: This paper reviews arguments and evidence on the impact of globalization on the environment, then presents evidence on production and international trade flows in five heavily polluting industries for 52 countries over the period 1981-98. A new decomposition of revealed comparative advantage (RCA) according to geographical origin reveals a delocalization to the South for all heavily polluting industries except non-ferrous metals that exhibits South-North delocalization in accordance with factor-abundance driven response to a reduction in trade barriers. Panel estimation of a gravity model of bilateral trade on the same data set reveals that, on average, polluting industries have higher barriers-to-trade costs (except non-ferrous metals with significantly lower barriers to trade) and little evidence of delocalization in response to a North-South regulatory gap.
Keywords: No keywords provided
JEL Codes: F18; Q28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| trade liberalization (F13) | increased pollution (Q53) |
| relocation of dirty industries (F64) | increased pollution (Q53) |
| trade liberalization (F13) | relocation of dirty industries (F64) |
| stricter environmental regulations (Q52) | trade patterns (F10) |
| transport costs (L91) | brake on north-south relocation (R42) |