Footloose and pollution-free

Josh Ederington, Arik Levinson, Jenny Minier

Research output: Contribution to journalArticlepeer-review

227 Scopus citations

Abstract

In numerous studies, economists have found little empirical evidence that environmental regulations affect trade flows. In this paper, we propose and test several common explanations for why the effect of environmental regulations on trade may be difficult to detect. We demonstrate that whereas most trade occurs among industrialized economies, environmental regulations have stronger effects on trade between industrialized and developing economies. We find that for most industries, pollution abatement costs are a small component of total costs, and are unrelated to trade flows. In addition, we show that those industries with the largest pollution abatement costs also happen to be the least geographically mobile, or footloose. After accounting for these distinctions, we measure a significant effect of pollution abatement costs on imports from developing countries, and in pollution-intensive, footloose industries.

Original languageEnglish
Pages (from-to)92-99
Number of pages8
JournalReview of Economics and Statistics
Volume87
Issue number1
DOIs
StatePublished - Feb 2005

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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