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          Effects of Environmental Regulations on South Asian Food and Agricultural Exports: A Gravity Analysis (English)
          Working paper by Wijesinghe, W.P.A.S., 2014, 27 pages
          Categories: Trade and Environment, Trade Policy Analysis and Trade Data Sources

          This paper investigates the effects of environmental regulation on the food and agricultural trade of four South Asian nations, i.e., Bangladesh, India, Pakistan and Sri Lanka. For this study, the Gravity Model for international trade analysis was used with country- and time-specific fixed effects followed by Heckman sample selection model to avoid possible biases that are widely cited in the gravity literature. The Environmental Performance Index was utilized as a proxy measure for the environmental regulation of the four SAARC nations and their trade partners to denote environmental regulation of reporting and partner countries. The results of the coefficient estimates revealed that even though there appears to be a relationship between stringent regulations and foreign trade without these specific effects, its significance fades as soon as both the importing and exporting country-specific effects are taken into consideration.

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