Environmental Stringency and Dirty Exports: an Empirical Analysis by

Abstract. The purpose of this study was to investigate how environmental stringency affects pollution intensive manufacturing industry exports. Further, this study aimed to find how exports of these polluting industries take place when the exporting country belongs to a certain trading group. An augmented gravity model was estimated separately for six pollution intensive manufacturing industries using panel data of 100 countries, during the period 2000-2004. The estimated gravity model showed a negative relationship with environmental stringency for three polluting industries which are Industrial Chemicals, Refined Petroleum Products and Non-metallic Mineral Products, during the period and also showed that these exports are high for the countries belong to some of the trading groups. The innovative feature of this study was its focus on bilateral polluting industry exports of 100 countries, in industry wise, which has not been covered by existing studies. Key words: Environmental stringency, gravity model, polluting industry export