Is there an environmental benefit to being an exporter? Evidence from firm-level data

One concern over globalisation is its impact on the environment. We analyse the consequences of becoming an exporter on a firm’s energy consumption. We show theoretically and empirically with firm-level data that the increase in energy use when exporting is negatively correlated with energy intensity. This is because, although energy use rises with exporting due to greater production and transportation, it can be offset by adopting more energy-efficient technology. This second effect is strongest for high energy intensity firms. As such, analysis of average effects, as in other studies, conceals important connections between the trade and the environment. Copyright Kiel Institute 2012