| This paper reviews arguments and evidence on the impact of globalization on the environment, the subject is Environmental Regulations and the International Trades, I analyze the trade effects of environmental regulations and their effective mechanisms on the base of studying the trade patterns and directions of pollution—intensive products, and examine the Pollution Haven Hypothesis and Dirty Industry Migration Hypothesis on evidence of environmental regulations and bilateral trade flows from the global level and Chinese levels respectively. My conclusions could provide the theoretical substantial evidences for design the set of environmental regulations in China.This dissertation is divided into seven chapters. The first chapter is an introduction; the second one is a survey of the theories and policies of trade and Environment. Chapter three is the theoretical analysis. First, I study the welfare effects of environmental regulations to the import country with models of partial equilibrium analysis both in small-country and large-country. Then I extend the cross section and dynamic models of trade effects of environmental regulations. In the two-country model, it is uncertainty that the warfare effects of environmental regulations of import country and export country. On the one hand, those environmental regulations could provide exact information of the quality, welfare of consumers would raise by keeping them from the potential harm, on the other hand the producer are suffered by innerlization of environment cost. While in my dynamic model of environmental regulations, the export firm will be "forced" to improve and upgrade by those environmental regulations of import country. There are inner innovations for the export firm to improve the technology and qualities after introducing the government strategy subsides. They would expedite the upgrade of technology in order to achieve the demand of environmental regulations in import country.The interaction between trade flows and environmental regulations has become quite a topical issue recently. There is a common belief that by applying more lenient environmental regulations, countries tend to reduce production cost of their manufacturers and thus improve their ability to export. In chapter 4, I examine the Dirty Industry Migration Hypothesis on evidence of trade pattern and trade flow of 11 kinds of pollution-intensive industries, and prove the Dirty Industry Migration Hypothesis paradox. After classifying the pollution-intensive industries again by taking the rank of pollution abatement costs both in US and China into consideration, I calculate the market share , export import ratio, TSE and Revealed Comparative Advantage Index(RCA) of these 53 SITC 3-digist level manufacturing industries from 1980 to 2003 by over 1 million dates in UNCTAD database. Comparing the change indexes, we can find that Dirty Industry Migration Hypothesis only effective in those resource-intensive and labor-intensive industries but inefficacy in those capital and techno-intensive industries. This is an obverse paradox of Dirty Industry Migration Hypothesis. The North-South regulatory gap make developing countries keeping advantages in resource-intensive and labor-intensive industries ( etc. Petroleum and coal products,Non-ferrous metals), while the abundance of capital and higher technology make developed country more competitive in capital and techno-intensive pollution industries (etc. Medicinal and pharmaceutical products, Paper and allied products and Chemicals and allied products), the RCA and TSE index are getting even higher than before.In Chapter 5, I study how environmental regulations affect the bilateral trade flows from both global and Chinese perspective. Demonstration model is an extended the gravity model which includes environmental regulations index, environmental cooperation index and trade flows, the estimation applied multidimensional multiple linear regression. In the examination of global perspective, the panel data of 51 sample countries are from 1990 to 1999 including 3 kinds of bilateral trade flows, such as total manufactures, pollution-intensive industries and footloose industries (non-resource intensive industries). Panel estimation of a gravity model of bilateral trade on the same data set reveals that, on average ,polluting industries have higher barriers-to-trade cost, the conclusion of this evidences is that the relationship between stricter environmental regulations and pollution-intensive products becomes statistical significant, but more complex with footloose pollution-intensive industries. While the domestic environmental regulations of import country became stricter, the import demand of total pollution-intensive products increased accordingly. As for those footloose pollution-intensive industries, the environmental regulations import of country became stricter will rise the FDI barriers of these industries, and decrease investments and trade in footloose pollution-intensive industries。while the environmental regulations in export country became stricter, producer will invest to the other countries with loose regulations, which is the FDI effects of trade, and the trade flows of footloose industries increase accordingly. My results show that the practice of multinational environment cooperation and the long-standing efforts of protect global environment had been proved statistical significant effect international trade flow, while multinational environment cooperation of import countries will decrease the international trade flow of pollution-intensive industries。The applied model is a revised gravity model in the evidence with panel data form the Chine perspective, I examine the relationships between environmental regulations index, environmental cooperation index and 3 kinds of bilateral trade flows in China and her 50 trade partner countries. I find that the domestic environmental regulations of China has done nothing to the bilateral trade flows, which means we haven't constructed the effective environmental regulations system yet; but the efforts of Government in multinational environment cooperation has limited the trade flow of pollution—intensive industries. another conclusion is that international environmental regulations are statistical in significant to China foreign trade, while it getting stricter import demand of pollution—intensive products from China will raise and the import of footloose industries in China will drop.We have shown in the paper that environmental regulations are indeed an important variable in the determination of trade flows. So far, the gravity studies did not provide conclusive results on the existence of pollution haven hypothesis... |
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