Thesis Public Defense | VNP29 - Đinh Hùng Danh

Trade and the environment: global evidence on the impacts of export quality, diversification, and trade margins (2002–2014)

Student: Đinh Hùng Danh, VNP-29

Supervisor: Dr. Nguyễn Quang

Abstract:

As global trade integration accelerates, concerns over its environmental consequences have intensified. This study examines how export characteristics, specifically export quality, diversification, and extensive versus intensive margins, which affect greenhouse gas emissions across key economic sectors including agriculture, land use, waste, buildings, construction, transport, electricity, and energy production. Using panel data spanning 2002–2014 for over 100 countries and employing multiple econometric specifications, we find that higher export quality and greater trade diversification are associated with increased emissions, particularly in energy, transport, and industrial sectors. This relationship reflects the energy-intensive nature of high-quality production processes and the environmental costs associated with broader trade expansion. Conversely, export concentration (lower diversification) is linked to reduced emissions, suggesting that sectoral specialization may mitigate pollution intensity. Among the trade dimensions examined, export extensive margins exhibit the weakest impact on emissions, indicating that expanding market reach through new products or destinations imposes lower environmental costs compared to intensifying existing trade relationships or upgrading export quality.

Our results have important policy implications for achieving sustainable trade growth. Countries seeking to reduce their export carbon footprint should pursue “smart specialization” by concentrating export efforts in sectors where they possess comparative advantage, rather than diversifying across unrelated industries. Additionally, policymakers should prioritize geographic market expansion and within-sector product innovation, as these strategies generate lower environmental costs compared to broad sectoral diversification. This study contributes to the growing literature on trade-environment linkages by providing empirical evidence on the differential environmental impacts of various trade strategies, offering valuable insights for designing sustainable trade policies that reconcile economic competitiveness with environmental preservation.

Keywords: Greenhouse gas emissions, Export quality, Export Diversification, Export extensive margin, Export intensive margin.