Do environmental provisions in regional trade agreements help to increase environmental innovation?

ABSTRACT

Assessing the effectiveness of environmental provisions in regional trade agreements (RTAs) on environmental outcome is important. This paper calculates the RTA strength with environmental provisions and RTA strength without environmental provisions. Then we explore the effect of environmental provisions in RTAs on environmental innovation using panel data for 77 countries from 1995 to 2013. The empirical results show that the overall RTA intensity signed by a country has no significant impact on environmental innovation. However, there are some differences when considering the presence of environmental provisions. Specifically, the RTA intensity with environmental provisions has no significant effect on its environmental innovation. However, a significant negative relationship exists between RTA intensity without environmental provisions and environmental innovation. Our conclusion provides policy insights for policymakers considering incorporating environmental provisions into RTAs.

KEYWORDS:

• Regional trade agreements
• environmental provisions
• environmental innovation
• fixed-effects models

JEL CLASSIFICATION:

• F13
• F18
• F62
• Q50

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the National Social Science Fund of China [21BJL111].