Citation

Discussion Paper Details

Please find the details for DP9111 in an easy to copy and paste format below:

Full Details

Title: Sources of Comparative Advantage in Polluting Industries

Author(s): Fernando A Broner, Paula Bustos and Vasco M Carvalho

Publication Date: September 2012

Keyword(s): air pollution, comparative advantage, environmental regulation and international trade

Programme Area(s): Development Economics, International Macroeconomics, International Trade and Regional Economics and Public Economics

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 identified 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.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9111

Bibliographic Reference

Broner, F, Bustos, P and Carvalho, V. 2012. 'Sources of Comparative Advantage in Polluting Industries'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9111