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Environmental Impact of Customs Union Agreement with EU on Turkey’s Trade in Manufacturing Industry

Author

Listed:
  • Elif Akbostanci

    (Department of Economics, METU)

  • G. Ipek Tunc

    (Department of Economics, METU)

  • Serap Turut-Asik

    (Department of Economics, METU)

Abstract

In this study, we analyze Turkey’s manufacturing industry trade by estimating sectoral import and export demand equations for 1980-2000. The study aims to understand whether the trade in the manufacturing industry complies with pollution haven hypothesis, and whether the free trade environment provided by the customs union (CU) agreement altered the trade pattern of the clean and dirty industries. Results of our econometric models have shown that while CU positively affects the import demand, it does not have any significant impact on the export demand of Turkish manufacturing industry. In terms of the environmental impact, distinction between clean and dirty industries turns out to be significant for both import and export demand. In general, our findings suggest that both clean and dirty industries’ import demand increase during the study period. In terms of export demand, clean industries’ export demand declines whereas dirty industries’ export demand increases compared to the total demand.

Suggested Citation

  • Elif Akbostanci & G. Ipek Tunc & Serap Turut-Asik, 2006. "Environmental Impact of Customs Union Agreement with EU on Turkey’s Trade in Manufacturing Industry," ERC Working Papers 0603, ERC - Economic Research Center, Middle East Technical University, revised Mar 2006.
    • Handle: RePEc:met:wpaper:0603
    as

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    File URL: http://erc.metu.edu.tr/en/system/files/menu/series06/0603.pdf
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    References listed on IDEAS

    as
    1. Morris Goldstein & Mohsin S. Khan, 2017. "Income and Price Effects in Foreign Trade," World Scientific Book Chapters, in: TRADE CURRENCIES AND FINANCE, chapter 1, pages 3-81, World Scientific Publishing Co. Pte. Ltd..
    2. Jeffrey A. Frankel & Andrew K. Rose, 2005. "Is Trade Good or Bad for the Environment? Sorting Out the Causality," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 85-91, February.
    3. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
    4. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Environmental impact analysis; EU; Turkey; manufacturing industry;
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