Environmental Efficiency and Trade Theory

Abstract

The impact of trade on environment remains a challenging area with empirical evidence offering mixed views. This study examines the role of trade on environmental efficiency of firms from the energy-intensive sector: metal sector. The environmental efficiency is estimated using multiple output production technology in an output distance approach and stochastic frontier analysis. The results of econometric analysis using panel data suggest a positive role of trade on environmental efficiency of metal firms. The findings of the study have implications for public policy and corporate managers. Show more