Home > Research > Publications & Outputs > The Short and Long-Run Effects of International...

Electronic data

View graph of relations

The Short and Long-Run Effects of International Environmental Agreements on Trade

Research output: Working paper

  • Josh Ederington
  • Mihai Paraschiv
  • Maurizio Zanardi
Publication date2018
Place of PublicationLancaster
PublisherLancaster University, Department of Economics
<mark>Original language</mark>English

Publication series

NameEconomics Working Papers Series


Does the ratification of an international environmental agreement (IEA) reduce
a country’s competitiveness on world markets? In this paper, we take a gravity regression
approach to answering this question by using industry-level bilateral trade
data and employing time-varying country fixed effects to control for the endogeneity
of treaty participation. We find that ratifying an IEA has significant (albeit small)
negative effects on the exports of a country’s median manufacturing industry as well as a compositional shift towards exporting cleaner goods. However, we also show that this negative competitive effect on the median manufacturing industry disappears in the long-run. In fact, the positive compositional shift becomes stronger in the long-run as a ratifying country sees a further decline in exports of dirtier industries which is more than compensated for by an increase in exports of cleaner industries, with an overall positive but negligible effect on employment.