Impact of Trade Openness on Carbon Productivity of Emerging Economies

Abstract

Trade openness has a great impact on a country’s ecological environment and production technology. A model of trade openness and carbon productivity was constructed based on the panel data as samples obtained from 11 emerging developing countries from 2002 to 2014, effects of technical progress, environmental regulation, and industrial structure upgrading were introduced to study the influencing mechanism of trade openness on carbon productivity, and subgroup test was performed as per the income level. The empirical results show that: 1) On the whole, the relationship between trade openness and carbon productivity is U-shaped. The trade openness, with a purpose of attracting foreign capital, would hinder technical progress and weaken domestic environmental regulation, thus lowering the carbon productivity. Meanwhile, the trade openness also accelerates industrial structure upgrading and therefore improves the carbon productivity. 2) As far as the economies at different income levels are concerned, the trade openness restrains technical progress and lowers the carbon productivity of the countries with upper- middle-income and high-income, but it accelerates technical progress of the countries with a lower-middle-income; Besides, the trade openness lowers the environmental regulation of the countries with a middle-income and thus decreases the carbon productivity, but it strengthens the environmental regulation of the countries with a high-income and thus increases the carbon productivity; In the meantime, the trade openness can upgrade the industrial structure and improve the carbon productivity of countries at different income levels.