• ISSN: 2010-023X
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing: Engineering & Technology Digital Library, ProQuest, Crossref, Electronic Journals Library , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2014 Vol.5(5): 379-385 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2014.V5.402

Trade, Environment and Economic Development: A Dynamic Relationship in East Asia

Jingjing Zhang
Abstract—This study investigates the dynamic relationship between trade, environment and economic development in East Asia. Empirical analysis based on panel cointegration technique suggests that there is a long-run stable relationship among economic development, trade and environmental pollution in East Asia. In order to examine the role of the level of economic development, the sample is extended to include some major world economies. The extended sample was then divided into three groups: East Asia, developed countries and developing countries. The estimated results based on panel VAR suggest the presence of interrelationship among all variables in each of three country-groups. The impulse response analysis reveals that shocks to economic development and trade in developing countries lead to a large increase in pollution. However, in the case of developed countries, an increase in GDP results in a decrease in pollution. We find that the level of economic development plays a crucial part in determining the direction of the interrelationship among trade, environment and economic growth.

Index Terms—International trade, environment, economic development, panel VAR.

Jingjing Zhang is with the University of Western Sydney, School of Business, NSW 2751, Australia (e-mail:njustzjj@gmail.com).

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Cite: Jingjing Zhang, "Trade, Environment and Economic Development: A Dynamic Relationship in East Asia," International Journal of Trade, Economics and Finance vol.5, no.5, pp. 379-385, 2014.

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