Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis

Posted: 17 Jun 2002

See all articles by Josh Ederington

Josh Ederington

University of Kentucky - Department of Economics

Jenny Minier

University of Kentucky - Department of Economics

Multiple version iconThere are 2 versions of this paper

Abstract

Should international trade agreements be extended to include negotiations over environmental policy? The answer depends on whether countries distort levels of environmental regulations as a secondary means of providing protection to domestic industries; our results suggest that they do. Previous studies of this relationship have treated the level of environmental regulation as exogenous, and found a negligible correlation between environmental regulation and trade flows. In contrast, we find that, when the level of environmental regulation is modeled as an endogenous variable, its estimated effect on trade flows is significantly higher than previously reported.

Keywords: Environmental regulation, trade flows

JEL Classification: F1, F14, F18

Suggested Citation

Ederington, Josh and Minier, Jenny, Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis. Canadian Journal of Economics, Vol 36, pp. 137-154, February 2003. Available at SSRN: https://ssrn.com/abstract=310420

Josh Ederington (Contact Author)

University of Kentucky - Department of Economics ( email )

335 Business and Economics Building
Lexington, KY 40506
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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