Chakraborty, Debashis and Mukherjee, Sacchidananda (2010): Relationship between Trade, Investment and Environment: A Review of Issues.
Download (298kB) | Preview
The inter-linkage between economic openness and environmental repercussions is a widely researched area. The current study contributes in the existing pool of research by conducting a cross-country empirical analysis for the year 2008 by exploring the interrelationship between openness indicators (trade and investment) and environmental performance of a country. For this purpose, the analysis separately considers export orientation, import orientation, FDI inwardness and FDI outwardness of the countries in different variations of the proposed empirical model. The regression results do not provide strong support to the Pollution Haven Hypothesis (PHH). The findings also confirm a relationship between socio-economic and socio-political factors in a country and its environmental performance.
|Item Type:||MPRA Paper|
|Original Title:||Relationship between Trade, Investment and Environment: A Review of Issues|
|Keywords:||Trade and Environment; International Investment|
|Subjects:||F - International Economics > F1 - Trade > F18 - Trade and Environment
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
|Depositing User:||Sacchidananda Mukherjee|
|Date Deposited:||16. Jun 2010 14:08|
|Last Modified:||14. Feb 2013 12:08|
Acharyya, Joysri (2009), “FDI, Growth and the Environment: Evidence from India on CO2 Emission during the Last Two Decades”, Journal of Economic Development, 34 (1): 43-58.
Akbostanci, E., G.I. Tunc and S. Turut-Asik (2004), “Pollution Haven Hypothesis and the Role of Dirty Industries in Turkey’s Exports”, ERC Working Paper No. 3, Department of Economics, Middle East Technical University.
Aminu, Aliyu, Mohammed (2005), “Foreign Direct Investment and the Environment: Pollution Haven Hypothesis Revisited”, Paper prepared for the Eight Annual Conference on Global Economic Analysis, Lübeck, Germany, June 9-11, [Online: web], Accessed January 15 2008 URL https://www.gtap.agecon.purdue.edu/resources/download/2131.pdf
Basel Action Network (2007), “Basel Non-Compliance Notification Report”, Country Violation: Japan, Seattle, [Online: web], Accessed February 6 2008 URL http://www.ban.org/Library/Japan_JPEPA_BNN2007_1.Final.pdf
Bernauer, Thomas and Koubi, Vasiliki (2004), “On the Political Determinants of Environmental Quality”, Paper presented at the annual meeting of the American Political Science Association, Hilton Chicago and the Palmer House Hilton, Chicago, Illinois, September 2, 2004.
Birdsall, N. and D. Wheeler (1993), “Trade Policy and Industrial Pollution in Latin America: Where are the Pollution Havens?” Journal of Environment and Development, 2 (1): 137–49.
Bruvoll, A. and H. Medin (2003) “Factors behind the environmental Kuznets curve: A decomposition of the changes in air pollution”, Environmental and Resource Economics, 24(1): 27–48.
Chakraborty, Debashis, “Impact of Stringent Environmental Measures on India’s Exports”, Presented at the International Conference on “Empirical Issues in International Trade & Finance”, Indian Institute of Foreign Trade, Kolkata, 23-24 December, 2008.
Chakraborty, Pavel and J. Singh (2005), Leather Bound: A Comprehensive Guide for SMEs, New Delhi: The Energy and Resources Institute.
Chattopadhyay, Sudeshna (2005), “Dirtier Trade for India? The Story of Globalization”, Contemporary Issues and Ideas in Social Sciences, 1 (3): 1-24.
Cole, Matthew A., Robert J.R. Elliott and Jing Zhang (2008), “Growth, Foreign Direct Investment and the Environment: Evidence from Chinese Cities”, [Online: web], Accessed October 9 2008 URL www.ceauk.org.uk/2008-conference-papers/Cole-Elliott-Zhang.doc
Cole, M.A., R.J.R. Elliott and P.G. Fredriksson (2006), “Endogenous pollution havens: Does FDI influence environmental regulations?”, Scandinavian Journal of Economics, 108(1):157.178.
Consumer Unity and Trust Society (CUTS) (2003), “How Mining Companies Influence the Environment”, Briefing Paper No. 1, Jaipur.
de Almeida, Luciana Togeiro and Sueila dos Santos Rocha (2008), “Beyond Pollution Haloes: The Environmental Effects of FDI in the Pulp and Paper and Petrochemicals Sectors in Brazil”, Working Group on Development and Environment in the Americas, Discussion Paper Number 17, [Online: web], Accessed May 24 2008 URL http://ase.tufts.edu/gdae/Pubs/rp/DP17Togeiro_RochaApr08.pdf
de Bruyn, S.M., J.C.J.M. van den Berg and J.B. Opschoor (1998) “Economic growth and emissions: reconsidering the empirical basis of Environmental Kuznets Curve”, Ecological Economics, 25(2): 161–175.
Dean, Judith M., Mary E. Lovely and Hua Wang (2004), “Foreign Direct Investment and Pollution Havens: Evaluating the Evidence from China”, Office of Economics Working Paper, U.S. International Trade Commission.
Dietzenbacher, Erik and Kakali Mukhopadhyay (2007), “An Empirical Examination of the Pollution Haven Hypothesis for India: Towards a Green Leontief Paradox?”, Environmental and Resource Economics, 36 (4): 427-449.
Eskeland, G.S. and A.E. Harrison (2003), “Moving to greener pastures? Multinationals and the pollution haven hypothesis”, Journal of Development Economics, 70 (1): 1-23.
Esty, Daniel C., M.A. Levy, C.H. Kim, A. de Sherbinin, T. Srebotnjak, and V. Mara (2008), “2008 Environmental Performance Index”. New Haven: Yale Center for Environmental Law and Policy.
Esty, D.C., M. A. Levy, T. Srebotnjak and A. de Sherbinin (2005), “2005 Environmental Sustainability Index: Benchmarking National Environmental Stewardship”, Yale Center for Environmental Law & Policy, New Haven.
Finer, Matt, Clinton N. Jenkins, Stuart L. Pimm, Brian Keane and Carl Ross, “Oil and Gas Projects in the Western Amazon: Threats to Wilderness, Biodiversity, and Indigenous Peoples”, [Online: web], Accessed May 19 2010 URL http://www.plosone.org/article/info:doi/10.1371/journal.pone.0002932
Fredriksson, P.G., J.A. List, and D.L. Millimet (2003), “Corruption, Environmental Policy, and FDI: Theory and Evidence from the United States”, Journal of Public Economics, 87: 1407-1430.
Gallagher, Kevin P. (2004), “Free Trade and the Environment: Mexico, NAFTA, and Beyond”, Stanford University Press: USA.
Gandal, Niel (2001), “Quantifying the Trade Impact of Compatibility Standards and Barriers: An Industrial Organization Perspective”, in K. E. Maskus and J. S. Wilson (eds) Quantifying the Impact of Technical Barriers to Trade: Can it be Done?, Ann Arbor: University of Michigan Press.
Ganslandt, M. and J. Markusen (2001), “Standards and Related Regulations In International Trade: A Modeling Approach”, in K. E. Maskus and J. S. Wilson (eds) Quantifying the Impact of Technical Barriers to Trade: Can it be Done? Ann Arbor: University of Michigan Press.
Government of India, Ministry of Commerce, “India’s submission to WTO”, (Document No. WT/CTE/W/65, 29 September 1997), New Delhi.
Grossman, G.M. and A.B. Krueger (1993), “Environmental impacts of a North American Free Trade Agreement” in Garber, P.M. (Ed), ‘The Mexico-U.S. Free Trade Agreement’, MIT Press, Cambridge.
He, Jie (2006), “Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces”, Ecological Economics, 60 (1): 228-245.
Henson, Spencer, Mohammed Saqib and D. Rajasenan (2004), “Impact of Sanitary Measures on Exports of Fishery Products from India: The Case of Kerala”, Agriculture and Rural Development Discussion Paper 17, World bank, Washington DC.
Hua Wang (2002), “Ownership and Industrial Pollution Control: Evidence from China1”, Annual Conference of American Agricultural Economics Association, Long Beach, California.
International Centre for Trade and Sustainable Development (2010), “Copenhagen Accord Not Enough to Address Climate Change”, February, [Online: web], Accessed May 2 2010 URL http://ictsd.org/i/news/bridges/69172/
Jena, P.R., N. C. Sahu and B. Rath (2005), “Does Trade Liberalisation Create Pollution Haven? An Indian Experience”, paper presented at the “International Conference on Environment and Development: Developing Countries Perspective”, April 7-8 2005, International Trade and Development Division, Jawaharlal Nehru University, New Delhi.
Jenkins, Rhys (1998), “Industrialization, Trade and Pollution in Latin America: A Review of the Issues”, Paper for delivery at the 1998 meeting of the Latin American Studies Association, Chicago, Illinois, September 24-26.
Jha, R. and K.V. Bhanu Murthy (2001), “An Inverse Global Environmental Kuznets Curve”, Departmental Working Papers: 2001–2002, Division of Economics, RSPAS, Australian National University, Canberra, Australia.
Jones, L., L. Fredricksen and T. Wates (2002), “Environmental Indicators”, 5th ed., The Fraser Institute, [Online: web], Accessed January 16, 2010 URL http://www.fraserinstitute.ca/shared/readmore.asp?snav=pb&id=314.
Kahn, Matthew E. (2003), “The geography of US pollution intensive trade: evidence from 1958 to 1994”, Regional Science and Urban Economics, 33 (4): 383–400.
Kellenberg, Derek K. (2009), “An empirical investigation of the pollution haven effect with strategic environment and trade policy”, Journal of international economics, 78(2): 242-255.
Kelso, Mark (2006), “Democracy and Environmental Protection: Exploring Possible Links”, Paper presented at the annual meeting of the Western Political Science Association, Hyatt Regency Albuquerque, Albuquerque, New Mexico, March 17, 2006.
Kirkpatrick, Colin and Kenichi Shimamoto (2005), “The Effect of Environmental Regulation on the Locational Choice of Japanese Foreign Direct Investment”, Working Paper No. 10, [Online: web], Accessed April 17 2007 URL http://ageconsearch.umn.edu/bitstream/30584/1/ia050010.pdf
Levinson, Arik and M. Scott Taylor (2004), “Unmasking the Pollution Haven Effect”, NBER Working Paper No. 10629, Cambridge.
List, J.A. and C.Y. Co (2000), “The Effects of Environmental Regulations on Foreign Direct Investment”, Journal of Environmental Economics and Management, 40 (1): 1-20.
Mbithi Mwikya, S. (2006), “Fisheries Access Agreements: Trade and Development issues”, International Trade and Sustainable Development (ICSTD) Series, Paper No 2, Geneva.
Merican, Yasmine, Zulkornain Yusop, Zaleha Mohd. Noor and Law Siong Hook (2007), “Foreign Direct Investment and the Pollution in Five ASEAN Nations”, International Journal of Economics and Management, 1 (2): 245–261.
Morrison, Andrea (2009), “Democracy and the Environment: The Visibility Factor”, Paper presented at the annual meeting of the Midwest Political Science Association 67th Annual National Conference, The Palmer House Hilton, Chicago, IL, April 2, 2009.
Mukherjee, Sacchidananda and Debashis Chakraborty (2010), “Is there any Relationship between Environment, Human Development, Political and Governance Regimes? Evidences from a Cross-Country Analysis", MPRA Paper 19968, University Library of Munich, Germany.
Mukherjee, Sacchidananda and Debashis Chakraborty (2009), “Environment, Human Development and Economic Growth: A Contemporary Analysis of Indian States”, International Journal of Global Environmental Issues, 9 (1 & 2): 20-49.
Mukhopadhyay, Kakali (2006), “Impact on the Environment of Thailand’s Trade with OECD Countries”, Asia-Pacific Trade and Investment Review, 2 (1): 25-46.
Mukhopadhyay, Kakali (2004), “Impact of Trade on Energy Use and Environment in India: A Input-output Analysis”, Paper presented for International conference “Input-output and General Equilibrium: Data, Modeling and Policy Analysis”, at the Free University of Brussels, Brussels, September.
Mukhopadhyay, Kakali and D. Chakraborty (2005), “Is liberalization of trade good for the environment? Evidence from India”, Asia-Pacific Development Journal, 12 (1): 109-136.
Otsuki, Tsun ehiro, John S Wilson and Mirvat Sewadeh (2000), “Saving Two in a Billion: A Case Study to Quantify the trade effect of European Food Safety Standards on African Exports”, World Bank Policy Research Working Paper No 2563, Washington D.C.: World Bank.
Prakash, Aseem and Matthew Potoski (2006), “New Dependencies: FDI and the Cross-Country Diffusion of ISO 14001 Management Systems”, [Online: web], Accessed July 22 2007 URL http://mba.tuck.dartmouth.edu/mechanisms/pages/Papers/prakash-potoski%20paper.pdf
Research and Information System for Developing Countries (2003), “Cancun Agenda: Environmental Requirements and Developing Countries’ Exports: Lessons for National, International and Regional Action”, Policy Brief No. 5, New Delhi: RIS.
Robbins, P. (2000), “The rotten institution: Corruption in natural resource management”, Political Geography, 19(4): 423-443.
Rock, M.T. (2002), Pollution Control in East Asia: Lessons from Newly Industrializing Economies, Washington D.C.: Resources for the Future.
Smarzynska, Beata K. and Shang-Jin Wei (2001), “Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?”, [Online: web], Accessed June 17 2006 URL http://www.econ.yale.edu/seminars/strategy/st02/smarzynska-020417.pdf
Temurshoev, Umed (2006), “Pollution Haven Hypothesis or Factor Endowment Hypothesis: Theory and Empirical Examination for the US and China”, Working Paper No. 292, Charles University, Prague.
The Economist (2008), “The economist intelligence unit's index of democracy 2008”, Technical report, October, New York: EIU.
Transparency International (2009), “Global Corruption Report 2009: Corruption and the Private Sector”, New York: Cambridge University Press.
United Nations (2009), “World Investment Report 2007”, New York and Geneva: UNCTAD.
United Nations Conference on Trade and Development, “Statistics on FDI”, [Online: web], URL http://stats.unctad.org/fdi
United Nations Development Programme (2009), “Human Development Report 2009 - Overcoming barriers: Human mobility and development”, New York: Palgrave Macmillan.
Wagner, Ulrich J. and Christopher Timmins (2009), “Agglomeration Effects in Foreign Direct Investment and the Pollution Haven Hypothesis”, Environmental and Resource Economics, 43(2): 231-256.
Welsch, H. (2004), “Corruption, Growth, and the Environment: A Cross-Country Analysis”, Environment and Development Economics, 9: 663-693.
Winbourne, Svetlana (2002), “Corruption and the Environment”, Management Systems International and USAID, Washington.
World Bank (2007), “Warming up to Trade: Harnessing International Trade to Support Climate Change Objectives”, World Bank Report No. 40217, Washington DC.
World Bank, “World Development Indicator”, [Online: web], URL http://data.worldbank.org/
WTO (2010), “Trade to expand by 9.5% in 2010 after a dismal 2009, WTO reports”, 26 March, [Online: web], Accessed May 24 2010 URL http://www.wto.org/english/news_e/pres10_e/pr598_e.htm
WTO (2007), “International Trade Statistics”, Geneva.
WTO (2006), “United States”, Trade Policy Review, Geneva.
Xing, Y. and C.D. Kolstad (2002), “Do Lax Environmental Regulations Attract Foreign Direct Investment?”, Environmental and Resource Economics, 21:1-22.