International Trade And Environmental Performance Index:Panel Analysis Of Twelve Emerging Economies Of Asia

The world has been facing serious environmental issues in recent times such as pollution,climate change,deforestation etc.The purpose of this study is to examine the relationship between international trade and the environmental performance index.Data of twelve emerging Asian countries is collected for the period 2002 to 2014.The panel regression techniques random effects model and fixed effects model along with the robust checks are used to analyze the data.The findings suggest that the free international trade have significant adverse affect on the environmental performance of the selected countries.Further the mediation analysis is used to identify the intermediary variables between trade and EPI.It is argued that the energy consumption and green-field investment are leading channels for the negative impact of international trade on the environment.The results suggest that strict environmental regulations and use of alternative energy should be increased to mitigate the harmful effects of international trade in emerging developing countries.It is also analyzed that higher manufacturing GDP,high per capita income and big population have considerable influence on the environmental performance.Overall the findings can be helpful for policy making in the emerging developing countries of Asia to ensure better environmental performance.