Work

Sources of Comparative Advantage in Polluting Industries

Year: 2012

Type: report

Abstract: We study the determinants of comparative advantage in polluting industries.We combine data on environmental policy at the country level with data on pollution intensity at the industry level to show that countries with laxer environmental regulation have a comparative advantage in polluting industries.Further, we address the potential problem of reverse causality.We propose an instrument for environmental regulation based on meteorological determinants of pollution dispersion identi…ed by the atmospheric pollution literature.We find that the effect of environmental regulation on the pattern of trade is causal and comparable in magnitude to the effect of physical and human capital.

Source: National Bureau of Economic Research

DOI: 10.3386/w18337

Authors: Fernando Broner, Paula Bustos, Vasco Carvalho

Institutions: National Bureau of Economic Research, Universitat Pompeu Fabra, Centre de Recerca en Economia Internacional, INSEAD, INSEAD

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

Funders: Fundación Ramón Areces, Ministerio de Ciencia e Innovación, FP7 Ideas: European Research Council