Did Trade Liberalization in India Promote High Polluting Goods? – An Empirical Analysis

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Title: Did Trade Liberalization in India Promote High Polluting Goods? – An Empirical Analysis
Author: Pathak, Swati
Advisors: Roger H. von Haefen, Committee Member
Ivan Kandilov, Committee Chair
Jean-Philippe (J.P.) Gervais , Committee Co-Chair
Abstract: Systematic removal of trade barrier across many industries during the early 1990s raised a debate over the role of trade on the environment. This thesis attempts to gain a deeper understanding of the environmental implications of trade liberalization in India. Data containing information on tariff rate, import, export, and production for 28 sectors from 1990 to 2001 are obtained from the World Bank Economic Review. To classify different trade sectors by pollution intensity, I used the three-digit International Standard Industrial Classification (ISIC) system. I used three different specifications with log of real production, export and import as the dependent variables in the empirical model. The coefficient of interest is β_5 which measures the differential impact on the percentage change in the dependent variables, caused by tariff reduction from before to after trade liberalization and from lower to higher polluting industries. My result confirms my first two hypotheses that average tariff reduction (41 percentage point) from pre to post liberalization period increase the total production and export in high polluting industries by 16.4% and 106.6% respectively. The study concludes that differential impact of average tariff reduction during trade liberalization in India promotes heavy polluting industries.
Date: 2009-07-29
Degree: MS
Discipline: Economics
URI: http://www.lib.ncsu.edu/resolver/1840.16/2137

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