Impact of Trade Liberalization on the Environment in Developing Countries

Abstract

This article aims at investigating the impact of trade openness on pollution and resource depletion in Nigeria. Results indicate that pollution is positively related to trade intensity and real GDP per square kilometer, while capital to labor ratio and GNP are negatively related to pollution. In addition, strong evidence suggests that trade intensity, real GDP per square kilometer and GNP are positively related to environmental degradation indicating that the technique, scale, and total effects of liberalization are detrimental to the environment. The composition effect of trade liberalization on natural resource utilization, on the other hand, is beneficial. A number of policy implications emerge from the study for Nigeria as well as other developing economies.

Keywords

development environmental degradation environmental Kuznets Curve trade liberalization

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