Footloose and Pollution-Free

26 Pages Posted: 26 May 2003 Last revised: 2 Nov 2010

See all articles by Josh Ederington

Josh Ederington

University of Kentucky - Department of Economics

Arik Levinson

Georgetown University - Department of Economics; National Bureau of Economic Research (NBER)

Jenny Minier

University of Kentucky - Department of Economics

Date Written: May 2003

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 while 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.

Suggested Citation

Ederington, Josh and Levinson, Arik M. and Minier, Jenny, Footloose and Pollution-Free (May 2003). NBER Working Paper No. w9718, Available at SSRN: https://ssrn.com/abstract=410645

Josh Ederington

University of Kentucky - Department of Economics ( email )

335 Business and Economics Building
Lexington, KY 40506
United States

Arik M. Levinson (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-5571 (Phone)
202-687-6102 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jenny Minier

University of Kentucky - Department of Economics ( email )

335 Business and Economics Building
Lexington, KY 40506
United States

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