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How Does Trade Openness Affect Carbon Emission? New International Evidence

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  • Yue Dou

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, P. R. China†UIBE Belt & Road Energy Trade and Development Center, University of International Business and Economics, Beijing 100029, P. R. China)

  • Kangyin Dong

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, P. R. China†UIBE Belt & Road Energy Trade and Development Center, University of International Business and Economics, Beijing 100029, P. R. China‡China Center for Energy Economics Research (CCEER), University of International Business and Economics, Beijing 100029, P. R. China)

  • Qingzhe Jiang

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, P. R. China†UIBE Belt & Road Energy Trade and Development Center, University of International Business and Economics, Beijing 100029, P. R. China)

  • Xiucheng Dong

    (School of International Trade and Economics, University of International Business and Economics, Beijing 100029, P. R. China†UIBE Belt & Road Energy Trade and Development Center, University of International Business and Economics, Beijing 100029, P. R. China)

Abstract

The nexus between trade openness and carbon dioxide (CO2) emissions remains unsettled in the existing literature. Using a balanced panel dataset for 76 countries from 1990 to 2019, this study empirically investigates the non-linear relationship between trade openness and CO2 emissions. Given the potential cross-sectional interdependence in the panel, we employ the system-generalised method of moments. We also conduct a mediating effect analysis to explore potential mediation effect in the trade openness-CO2 nexus. Finally, the regional heterogeneity is discussed. The empirical results revealed an inverted U-shaped relationship between trade openness and CO2 emissions, indicating that CO2 emissions increase initially with an expansion of trade openness, then decline after trade openness crossing the turning point. Furthermore, three mediation effects (i.e. scale effect, technique effect and composition effect) exist in the nexus between trade openness and CO2 emissions. Additionally, the impact of trade openness is heterogeneous across different regions. The main research results show that technique spillover is an important way to achieve a win-win situation in emission reduction and trade openness.

Suggested Citation

  • Yue Dou & Kangyin Dong & Qingzhe Jiang & Xiucheng Dong, 2020. "How Does Trade Openness Affect Carbon Emission? New International Evidence," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 22(03n04), pages 1-31, December.
    • Handle: RePEc:wsi:jeapmx:v:22:y:2020:i:03n04:n:s1464333222500053
    DOI: 10.1142/S1464333222500053
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    Cited by:

    1. Amin, Sakib & Jamasb, Tooraj & Llorca, Manuel & Marsiliani, Laura & Renström, Thomas I., 2022. "Decarbonisation policies and energy price reforms in Bangladesh," Energy Policy, Elsevier, vol. 170(C).
    2. Liu Xia & Nazneen Fatema & Mariya Rahman & Md. Mominur Rahman, 2024. "Does Green Financing Moderate the Effect of Trade Openness on Carbon Emissions in Emerging Countries?," SAGE Open, , vol. 14(3), pages 21582440241, September.
    3. Wang, Jianda & Dong, Kangyin & Dong, Xiucheng & Taghizadeh-Hesary, Farhad, 2022. "Assessing the digital economy and its carbon-mitigation effects: The case of China," Energy Economics, Elsevier, vol. 113(C).
    4. Liu, Yang & Wang, Jianda & Dong, Kangyin & Taghizadeh-Hesary, Farhad, 2023. "How does natural resource abundance affect green total factor productivity in the era of green finance? Global evidence," Resources Policy, Elsevier, vol. 81(C).
    5. Zhang, Dongyang & Mohsin, Muhammad & Taghizadeh-Hesary, Farhad, 2022. "Does green finance counteract the climate change mitigation: Asymmetric effect of renewable energy investment and R&D," Energy Economics, Elsevier, vol. 113(C).
    6. Liu, Yang & Zhao, Xiaomeng & Dong, Kangyin & Jiang, Qingzhe, 2023. "Assessing the role of green finance in sustainable energy investments by power utilities: Evidence from China," Utilities Policy, Elsevier, vol. 84(C).
    7. Ngo, Thanh Quang, 2024. "Natural resource rents, clean energy, and green total factor productivity. Evidence from Vietnam in pre-post Covid era," Resources Policy, Elsevier, vol. 88(C).
    8. Pami Dua & Neha Verma & Deepika Goel, 2024. "Trade, FDI and Emissions in South Asia: Role of Global and Regional Linkages," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 25(2), pages 103-125, September.

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