Munich Personal RePEc Archive

Trade and Environment: Do Spatial Effects Matter?

Azam, Sardor (2016): Trade and Environment: Do Spatial Effects Matter? Published in: Journal of Applied Economics and Business Research , Vol. 6, No. 2 (June 2016): pp. 161-174.


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This study tests the suitability of spatial effects in trade context. The paper analyzes the effect of the strictness of environmental regulations on trade performance on the basis of augmented gravity model. It compares spatial estimates with those of OLS and concludes that spatial effects are important. The results indicate that Spatial Error Model fits best to the data at hand. It is shown that environmental standards are positively correlated with trade.

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