International production fragmentation,trade in intermediate goods and environment |
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| Affiliation: | 1. IDE-JETRO, JCN 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba, 261-8545, Japan;2. King''s College London, Political Economy and IDI, Strand Campus, London, United Kingdom;1. Institute of Industrial Economics, The Chinese Academy of Social Sciences, No. 2 Yuetan Beixiaojie, Xicheng District, 100836 Beijing, China.;2. International Business School Suzhou, Xi''an Jiaotong-Liverpool University, 111 Ren''ai Road, Dushu Lake Higher Education Town, Suzhou, China.;3. National Institute of International Strategy, Chinese Academy of Social Sciences, No.3 Zhangzizhong Road, Beijing 100007, China |
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| Abstract: | This paper examines the implications of growing international production fragmentation-induced trade in intermediate goods on environmental quality. Specifically, by making use of a general equilibrium framework, this paper explores the link between trade in intermediate goods and pollution in a setting of endogenous environmental policy. The paper shows that international trade in intermediate goods, through an increase in the number of components available to the international producers, affects the level of pollution and environmental quality. Specifically, developed countries may reduce pollution at the cost of more pollution in developing countries. |
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| Keywords: | International production fragmentation Intermediate goods trade Endogenous environmental policy Environmental quality F18 |
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