Is dirty trade concentrating in more polluting countries? Evidence from Africa

Abstract

Among growing concerns about the environmental impact of human activities, international trade is increasingly in the spotlight. However, the role of Africa has been widely disregarded. In this paper, we assess the trade–environment link in African trade patterns by estimating a gravity model for trade with data from 140 countries for the period 2002–2018. Our findings reveal significant insights: first, that dirty trade appears to be increasingly concentrating in African countries. That is, exports of dirty goods seem to have shifted to countries with less stringent environmental regulations. Second, exports from dirty industries tend to concentrate in those countries with higher levels of capital endowments, although this effect appears to be weaker. Third, the results hold when we consider different exporter and importer country scenarios, such as trade flows with Europe (the main African trading regional partner) and intraregional African trade patterns. In addition, they hold especially for more differentiated products, with some particularities in the case of homogeneous ones. These findings have important implications in terms of both trade and environmental policies as well as for building the basis for sustainable development in Africa.