The world trade network and the environment

Aller, Carlos, Ductor, Lorenzo and Herrerias, Maria Jesus (2015) The world trade network and the environment. Energy Economics, 52 (Part A) . pp. 55-68. ISSN 0140-9883 (doi:10.1016/j.eneco.2015.09.008)

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This papers analyses the role of the world trade network on the environment. We rely on methods developed for social network analysis to identify the most important countries in connecting trade between all the other countries in the world trade network. We then estimate how the network or indirect effects from trade affect the environmental quality of a country. As the trade networks are endogenously determined by trade and environmental conditions, we use as instrumental variables the growth in the population of trade partners and the growth in the population of trade partners' partners to exploit exogenous variation in the world trade network. Once we simultaneously estimate the environmental, trade, income and network equations using a three-stage least square procedure, we find that network effects harm the environmental quality of developed countries but improve the environment of developing countries.

Item Type: Article
Additional Information: Available online 25 September 2015
Research Areas: A. > Business School > Economics
Item ID: 17627
Depositing User: Lorenzo Ductor Gomez
Date Deposited: 23 Sep 2015 11:08
Last Modified: 28 Aug 2019 00:05

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