Effects of the export product quality on carbon dioxide emissions: evidence from developing economies

Abstract

Using the new measure of the export quality of the International Monetary Fund (IMF), this paper investigates the effects of the product quality of exports on the growth rate of the per capita carbon dioxide emissions. The paper focuses on the panel dataset of 82 developing economies for the period from 1970 to 2014. Along with the index of export quality, we also consider the measures of the per capita income, per capita energy consumption, natural resource rents, and trade openness. The results indicate that there is the positive impact of the quality of exports on carbon dioxide emissions. There is also the positive relationship between the per capita income and carbon dioxide emissions. In addition, we find that the trade openness measures are positively related to carbon dioxide emissions. These results are robust to consider different income measures and to divide the developing economies, according to their income levels.

Keywords: Carbon dioxide emissions; Export quality; International trade; Panel data estimation techniques; Trade openness; Upgrading the export basket.