This thesis examines the impact of environmental regulations on trade competitiveness for South
Asian countries. The study further investigates whether South Asian countries have become a
pollutive haven of industrial exports to OECD countries during 1984-2004. The thesis also analyses
whether tariff walls created by the governments to offsets stringent environmental regulations
negatively affect pollutive industrial trade flows. This study has identified gaps in the literature
after critically reviewing both competing trade theories and empirical literature surrounding the
subject. Firstly, most of the empirical literature on the subject has focused on developed countries
while ignoring less developed regions like South Asia. Second, several studies concluded trade
competitiveness impact of environmental policy following a single estimation method when results
are sensitive to the choice of the method used. Hence, for robust results, cross-methods analysis
was imperative. Thirdly, the empirical literature on the subject focused on most pollutive industries
and ignored the research on somewhat pollutive and least pollutive sectors as well as comparative
analysis between those industries. This study has contributed to the literature by filling these gaps.
Following the neo-classical theory, the central hypothesis of this thesis is that environmental
regulations negatively affect different categories of pollutive industrial export competitiveness. By
using the highest dis-aggregated ISIC level trade data and incorporating other socio-economic
variables, this study has deployed comparative advantage trade models by Balassa (1965),
competitiveness indicator by XU (1999), and bilateral RCA model by Grether and de Melo (2004). The study used the gravity model to control for un-observed effects over time on trade flows while
capturing environmental regulations impact on pollutive industrial trade competitiveness.
Accordingly, to avert endogeneity/data sensitivity issues and to ascertain robust estimates, the
present research has among others computed Random Effect and Newey-West standard error
models. The statistical modeling results show that while India gained trade competitiveness in most
pollutive industrial trade, Pakistan and Bangladesh lost their trade competitiveness in the same category. The research finds evidence of most pollutive industries of South Asian countries
increasing their bilateral RCAs and exports with OECD countries and reset of the world. A
comparative analysis between most pollutive to less pollutive industries showed a lack of support
for any systematic specialization patterns of trade for South Asia during 1984-2004. Nonetheless,
this study findings based on gravity modeling clearly depicted a statistically significant negative
impact of environmental regulations on total exports, most pollutive exports, and less pollutive
industrial exports for South Asia and OECD countries. This study rejected the pollution haven
hypothesis between South Asian pollutive industrial exports with OECD. It further concluded that
tariff barriers created by countries to offsets environmental regulation costs would prove
counterproductive to competitiveness. At the policy level, instead of lobbing for protectionism to
balance out environmental regulatory costs, the governments in both developed and developing
countries need to focus on forming better environmental policies fostering both competitiveness
and environmental quality. Also, trade-offs between environmental regulations and
competitiveness are challenging situations for South Asia and OECD countries. Therefore,
sustainable production and trade policies combined with innovative and cost-effective
environmental policies are needed to accomplish environmental gains and competitiveness.
| Identifer | oai:union.ndltd.org:BRADFORD/oai:bradscholars.brad.ac.uk:10454/19251 |
| Date | January 2020 |
| Creators | Saleem, Irfan |
| Contributors | Jalilian, Hossein |
| Publisher | University of Bradford, Faculty of Management, Law and Social Sciences |
| Source Sets | Bradford Scholars |
| Language | English |
| Detected Language | English |
| Type | Thesis, doctoral, PhD |
| Rights | <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/"><img alt="Creative Commons License" style="border-width:0" src="http://i.creativecommons.org/l/by-nc-nd/3.0/88x31.png" /></a><br />The University of Bradford theses are licenced under a <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/">Creative Commons Licence</a>. |
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