Exporting and Environmental Performance: Where You Export Matters
Empirical analyses that rely on micro - level panel data have found that exporters generally pollute less than non exporters . While alternative explanations have been proposed, firm - level data has not been used to examine the role of destination markets in th e relationship between exports and pollution. In this paper , we argue that because consumers in high - income countries value clean environments more than consumers in developing countries, exporters targeting high - income countries are more likely to improve their environmental outcomes than exporters targeting destinations where the environment is not valued highly . Using a panel of firm - level data from Chile we find support for this hypothesis. A 10 - percentage - point increase in the share of exports to high - income countries is associated with a reduction in CO 2 pollution intensity of about 16%. The results have important implications for firms in developing countries aiming to target high - income markets.
