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Free Trade and Pollution in the Manufacturing Industry in Mexico : A Verification of the Inverse Kuznets Curve at a State Level

Author

Listed:
  • Elena Catalina Jáuregui Nolen

    (London School of Economics and Political Science)

  • José de Jesús Salazar Cantú
  • Raymundo Cruz Rodríguez Guajardo
  • Héctor González García

Abstract

There has been a long debate about the effects that free trade has on pollution. Most empirical analysis on this topic has focused at the national level. The objective of this study is to see if there is a relationship between the pollution generated by the manufacturing industry in each of Mexico’s 32 states and the North American Free Trade Agreement (NAFTA). This was done via panel data regression models using information on pollution, income, and degree of trade from each of the states for the years 1993 and 2000. The pollution index level was constructed using the Industrial Pollution Projection System from the World Bank. In general we found a positive relationship between trade liberalization and pollution caused by manufacturing. Furthermore, we found that income and pollution follow the relationship expressed in the Environmental Kuznets Curve.

Suggested Citation

  • Elena Catalina Jáuregui Nolen & José de Jesús Salazar Cantú & Raymundo Cruz Rodríguez Guajardo & Héctor González García, 2010. "Free Trade and Pollution in the Manufacturing Industry in Mexico : A Verification of the Inverse Kuznets Curve at a State Level," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 99-119, November.
    • Handle: RePEc:ere:journl:v:xxix:y:2010:i:2:p:99-119
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    File URL: http://www.economia.uanl.mx/revistaensayos/xxix/2/Jauregui-Salazar-Free-trade.pdf
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    References listed on IDEAS

    as
    1. Francisco Rodríguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338, National Bureau of Economic Research, Inc.
    2. Steininger, Karl, 1994. "Reconciling trade and environment: towards a comparative advantage for long-term policy goals," Ecological Economics, Elsevier, vol. 9(1), pages 23-42, January.
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    More about this item

    Keywords

    Free Trade; Pollution in manufacturing industry; Environmental Kuznets Curve; State-level data;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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