The world trade network and the environment

Research output: Contribution to journalArticlepeer-review

Authors

Colleges, School and Institutes

Abstract

This paper 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.

Details

Original languageEnglish
Pages (from-to)55-68
JournalEnergy Economics
Volume52
Early online date25 Sep 2015
Publication statusE-pub ahead of print - 25 Sep 2015

Keywords

  • World trade network, carbon dioxide emissions, centrality measures