The Impact of Trade and Economic Growth on the Environment: Revisiting the Cross‐country Evidence

This paper explores the inter‐relations between economic growth, international trade and environmental degradation empirically by using panel data. Previous critique, especially on the econometric specification, is embedded. Several environmental factors and one sustainability indicator are analysed. The results indicate that there is an environmental Kuznets curve for most pollutants, but with several reservations. None of the various hypotheses that concern the link between trade and environmental degradation can be entirely confirmed. There is modest support for the pollution haven hypothesis. In addition, trade liberalisation might be beneficial to sustainable development for rich countries but harmful to poor ones.