IDEAS home Printed from https://ideas.repec.org/a/aiy/jnjaer/v22y2023i4p975-1005.html
   My bibliography  Save this article

Modeling of the Nexus Between Environmental Regulations of Trade Partners and Export Volumes: Analysis of Russian Regions

Author

Listed:
  • Yulia D. Sokolova

Abstract

Export development is one of the priorities of the Russian economy. Exporters and companies planning to enter the international market face a number of limiting factors. Transitional climate risks, mainly represented by trading partner countries' environmental regulation aimed at internalizing national and global negative environmental externalities, are also among these factors. However, the global climate agenda can not only have a negative impact on export performance, but also generate growth opportunities. The purpose of this study is the econometric modeling of the impact of environmental regulation of trading partner countries on the dynamics of export volumes of Russia's regions based on data for the period of 2013-2020. In addition, the study is aimed at identifying regional factors that determine the sign of the influence of climate regulation of importing countries on export volumes. The study assumes that the effect of climate regulation on export performance is different for the regions of Russia and is determined by institutional and environmental characteristics. The estimation of the gravity equation using the Poisson pseudo-maximum likelihood method for different subsamples of Russia's regions demonstrated that the stringency of environmental regulation of the partner countries is negatively related to the volumes of Russian exports, but there is a positive correlation in the case of regions characterized by favorable conditions for innovation activity and active environmental policy. It was also detected that the regional budget spending on environmental protection do not provide a stimulating effect of climate regulations. Thus, in order to minimize the negative impact of transitional climate risks, special attention of the state should be paid to creating an environment conducive to innovation and the formation of the most effective environmental policy at the regional and national levels. The theoretical significance of the study lies in expanding the traditional gravity model by including the environmental determinants of trade, while the practical significance of the work is represented by recommendations to regional authorities on minimizing the negative impact of transitional climate risks.

Suggested Citation

  • Yulia D. Sokolova, 2023. "Modeling of the Nexus Between Environmental Regulations of Trade Partners and Export Volumes: Analysis of Russian Regions," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(4), pages 975-1005.
    • Handle: RePEc:aiy:jnjaer:v:22:y:2023:i:4:p:975-1005
    DOI: https://doi.org/10.15826/vestnik.2023.22.4.038
    as

    Download full text from publisher

    File URL: https://journalaer.ru//fileadmin/user_upload/site_15934/2023/08_Sokolova.pdf
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.15826/vestnik.2023.22.4.038?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lawrence H. Goulder & Ian W. H. Parry, 2008. "Instrument Choice in Environmental Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 152-174, Summer.
    2. Copeland, Brian R. & Taylor, M. Scott, 1999. "Trade, spatial separation, and the environment," Journal of International Economics, Elsevier, vol. 47(1), pages 137-168, February.
    3. Ben Shepherd, 2012. "The Gravity Model of International Trade: A User Guide," ARTNeT Books and Research Reports, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), number brr11.
    4. Helm, Dieter & Pearce, David W, 1990. "Assessment: Economic Policy towards the Environment," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 6(1), pages 1-16, Spring.
    5. Selim Cagatay & Hakan Mihci, 2006. "Degree of environmental stringency and the impact on trade patterns," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 33(1), pages 30-51, January.
    6. Glazatova, M. & Daniltsev, A., 2020. "Main trends in the development of world trade and structural features of Russian exports," Journal of the New Economic Association, New Economic Association, vol. 45(1), pages 183-192.
    7. Tsurumi Tetsuya & Managi Shunsuke & Hibiki Akira, 2015. "Do Environmental Regulations Increase Bilateral Trade Flows?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1549-1577, October.
    8. James A. Tobey, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Wiley Blackwell, vol. 43(2), pages 191-209, May.
    9. Forslid, Rikard & Okubo, Toshihiro & Ulltveit-Moe, Karen Helene, 2018. "Why are firms that export cleaner? International trade, abatement and environmental emissions," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 166-183.
    10. LeClair, Mark S. & Franceschi, Dina, 2006. "Externalities in international trade: The case for differential tariffs," Ecological Economics, Elsevier, vol. 58(3), pages 462-472, June.
    11. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    12. Pothen, Frank & Hübler, Michael, 2018. "The interaction of climate and trade policy," European Economic Review, Elsevier, vol. 107(C), pages 1-26.
    13. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
    14. Rahel Aichele & Gabriel Felbermayr, 2015. "Kyoto and Carbon Leakage: An Empirical Analysis of the Carbon Content of Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 104-115, March.
    15. I. A. Makarov & Henry Chen & Sergey V. Paltsev., 2018. "Impacts of Paris Agreement on Russian economy," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.
    16. I. A. Makarov & H. Chen & S. V. Paltsev, 2018. "Impacts of Paris Agreement on Russian economy," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 4.
    17. Yingyuan Guo & Xingneng Xia & Sheng Zhang & Danping Zhang, 2018. "Environmental Regulation, Government R&D Funding and Green Technology Innovation: Evidence from China Provincial Data," Sustainability, MDPI, vol. 10(4), pages 1-21, March.
    18. William Nordhaus, 2015. "Climate Clubs: Overcoming Free-Riding in International Climate Policy," American Economic Review, American Economic Association, vol. 105(4), pages 1339-1370, April.
    19. Pethig, Rudiger, 1976. "Pollution, welfare, and environmental policy in the theory of Comparative Advantage," Journal of Environmental Economics and Management, Elsevier, vol. 2(3), pages 160-169, February.
    20. David Greenaway & Richard Kneller, 2004. "Exporting and Productivity in the United Kingdom," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(3), pages 358-371, Autumn.
    21. Igor Makarov & Henry Chen & Sergey Paltsev, 2020. "Impacts of climate change policies worldwide on the Russian economy," Climate Policy, Taylor & Francis Journals, vol. 20(10), pages 1242-1256, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naegele, Helene & Zaklan, Aleksandar, 2019. "Does the EU ETS cause carbon leakage in European manufacturing?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 93, pages 125-147.
    2. Rauscher, Michael, 2001. "International trade, foreign investment, and the environment," Thuenen-Series of Applied Economic Theory 29, University of Rostock, Institute of Economics.
    3. Gabriel Felbermayr & Sonja Peterson & Joschka Wanner, 2022. "The Impact of Trade and Trade Policy on the Environment and the Climate. A Review," WIFO Working Papers 649, WIFO.
    4. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 0204, Economics Division, School of Social Sciences, University of Southampton.
    5. Kwon, Ohyun & Zhao, Hao & Zhao, Min Qiang, 2023. "Global firms and emissions: Investigating the dual channels of emissions abatement," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    6. Jayadevappa, Ravishankar & Chhatre, Sumedha, 2000. "International trade and environmental quality: a survey," Ecological Economics, Elsevier, vol. 32(2), pages 175-194, February.
    7. Haixiao Huang, Walter C. Labys, 2002. "Environment and trade: a review of issues and methods," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 2(1/2), pages 100-160.
    8. Barrows, Geoffrey & Ollivier, Hélène, 2021. "Foreign demand, developing country exports, and CO2 emissions: Firm-level evidence from India," Journal of Development Economics, Elsevier, vol. 149(C).
    9. Kalsbach, Oliver & Rausch, Sebastian, 2024. "Pricing carbon in a multi-sector economy with social discounting," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    10. Mario Larch & Joschka Wanner, 2019. "The Consequences of Unilateral Withdrawals from the Paris Agreement," CESifo Working Paper Series 7804, CESifo.
    11. Larch, Mario & Wanner, Joschka, 2024. "The consequences of non-participation in the Paris Agreement," Open Access Publications from Kiel Institute for the World Economy 302105, Kiel Institute for the World Economy (IfW Kiel).
    12. Hartmut Egger & Udo Kreickemeier & Philipp M. Richter, 2021. "Environmental Policy and Firm Selection in the Open Economy," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 8(4), pages 655-690.
    13. Anouliès, Lisa, 2017. "Heterogeneous firms and the environment: a cap-and-trade program," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 84-101.
    14. Xiao Chen & Alan Woodland, 2013. "International trade and climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(3), pages 381-413, June.
    15. Larch, Mario & Wanner, Joschka, 2024. "The consequences of non-participation in the Paris Agreement," European Economic Review, Elsevier, vol. 163(C).
    16. Xing, Yuqing & Kolstad, Charles, 1996. "Environment and Trade: A Review of Theory and Issues," MPRA Paper 27694, University Library of Munich, Germany.
    17. Don Clark & Marchese Serafino & Zarrilli Simonetta, 2000. "Do Dirty Industries Conduct Offshore Assembly In Developing Countries?," International Economic Journal, Taylor & Francis Journals, vol. 14(3), pages 75-86.
    18. Geoffrey Barrows & Helene Ollivier, 2018. "Foreign Demand and Greenhouse Gas Emissions: Empirical Evidence with Implications for Leakage," Working Papers 2018.16, FAERE - French Association of Environmental and Resource Economists.
    19. Xin Liu & Zhiyong Kang, 2022. "Environmental Policy and Exports in China: An Analysis Based on the Top 10,000 Energy-Consuming Enterprises Program," Sustainability, MDPI, vol. 14(21), pages 1-16, October.
    20. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 204, Economics Division, School of Social Sciences, University of Southampton.

    More about this item

    Keywords

    regions; export; environmental regulation; conditions for innovation activity; gravity model of international trade; poisson pseudo-maximum likelihood method.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aiy:jnjaer:v:22:y:2023:i:4:p:975-1005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Natalia Starodubets (email available below). General contact details of provider: https://edirc.repec.org/data/seurfru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.