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Pollution haven hypothesis and India's intra-industry trade: an analysis

Pollution haven hypothesis and India's intra-industry trade: an analysis With the adoption of trade liberalisation measures India's merchandised trade has expanded considerably in post-1991. One of the important factors of such commendable growth is the significant expansion in India's Intra-industry Trade. Given this circumstance, it is an important task to find out whether such rapid growth in Intra-industry Trade (IIT) has any detrimental effect on the environment. With this purpose, the current paper measures the shares of pollution content of India's 'inter-industry trade' and 'IIT', and its impact on the environment by using Input-Output framework for the period 2001–2002 to 2011–2012. Applying the Grubel-Lloyd index the paper estimates the shares of IIT including Vertical and Horizontal in India's total trade with the USA and the EU-27. It observes that the Vertical IIT is dominant over those of the Horizontal IIT and export in IIT is highly pollution intensive. Above all, the results of Pollution terms of trade provide stronger evidence on the pollution haven effect. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Innovation and Sustainable Development Inderscience Publishers

Pollution haven hypothesis and India's intra-industry trade: an analysis

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd
ISSN
1740-8822
eISSN
1740-8830
DOI
10.1504/IJISD.2018.091538
Publisher site
See Article on Publisher Site

Abstract

With the adoption of trade liberalisation measures India's merchandised trade has expanded considerably in post-1991. One of the important factors of such commendable growth is the significant expansion in India's Intra-industry Trade. Given this circumstance, it is an important task to find out whether such rapid growth in Intra-industry Trade (IIT) has any detrimental effect on the environment. With this purpose, the current paper measures the shares of pollution content of India's 'inter-industry trade' and 'IIT', and its impact on the environment by using Input-Output framework for the period 2001–2002 to 2011–2012. Applying the Grubel-Lloyd index the paper estimates the shares of IIT including Vertical and Horizontal in India's total trade with the USA and the EU-27. It observes that the Vertical IIT is dominant over those of the Horizontal IIT and export in IIT is highly pollution intensive. Above all, the results of Pollution terms of trade provide stronger evidence on the pollution haven effect.

Journal

International Journal of Innovation and Sustainable DevelopmentInderscience Publishers

Published: Jan 1, 2018

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