Exporting and pollution abatement expenditure: Evidence from firm-level data

The relevance of analyzing whether exporting firms engage in greater pollution abatement cannot be overemphasized. For instance, the question relates to possibility export promotion policies being environmentally beneficial. Thus, issue is especially relevant for developing countries typically characterized by weak enforcement environmental regulation. However, despite extensive literature assessing consequences aggregate trade, evidence from firm-level trade relatively scarce and skewed toward developed countries. Accordingly, we employ cross-sectional data across Indonesian assess causal effect on behavior. Due concerns over non-random selection into exporting, also resort a number novel identification strategies. Two approaches are proposed Millimet Tchernis (2013) entail either minimizing or correcting bias. remaining methods, attributable Lewbel (2012) Klein Vella (2009), rely higher moments obtain exclusion restrictions. While largely find encourage abatement, estimated impacts more pronounced after accounting endogeneity status.