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Will ASEAN countries be a potential choice for the export of pollution intensive goods?

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Abstract

China, being the world’s largest exporter, has now certain environmental commitments such as to achieve carbon neutrality before 2060. These commitments of China has raised a reasonable concern regarding the expected reduction in the production and export of pollution intensive goods in the future. Besides China, the most efficient countries in the region to produce these goods are most of the member countries from ASEAN. The current study therefore aims to analyze if in the future, China reduces the production and export of these goods, whether the selected ASEAN countries can be the next choice for the export of pollution intensive goods. Based on the data availability for the period 1990–2019, this study considers five selected ASEAN countries (ASEAN-5). The results are based on the Auto Regressive Distributive Lag (ARDL) bound testing approach to cointegration and Error Correction Modeling (ECM). The aggregate analysis of five pollution intensive goods (pulp and paper (341), industrial chemicals (351), non-metallic minerals products (369), iron and steel (371) and non-ferrous metals (372)) suggests that Foreign direct investment (FDI) inflow can significantly increase the export of pollution intensive goods only in case of Indonesia, Malaysia and Thailand. However, there is no significant effect of FDI on the export of pollution intensive goods in case of Philippines and Singapore. The disaggregate analyses of the five pollution intensive goods suggest that in each of the ASEAN-5 countries, FDI inflow can significantly increase the export of pollution intensive goods in some of these industries rather than in all of them. In nutshell, it is concluded that ASEAN-5 countries can be a potential choice for the export of pollution intensive goods in some of the pollution intensive industries but not in all of them.

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Notes

  1. Mani and Wheeler (1998) have pointed several pollution intensive goods on the basis of relatively higher pollution abetment cost for these goods. These goods are: pulp and paper (341), industrial chemicals (351), non-metallic minerals products (369), iron and steel (371) and non-ferrous metals (372).

  2. China’s major export destinations in 2019 are USA, Hong Kong, Japan, Korea Rep, Vietnam, Germany, India, Netherlands, UK, Singapore, Russia.

  3. Singapore has minimum restrictiveness (0.013 score of FDI regulatory index) on FDI inflow, even in some of the pollution- intensive industries.

  4. Economic Community of West African States

  5. ASEAN has ten member countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam

  6. ARDL approach to cointegration is suitable for a data series where some variables are stationary at level I(0) and the others are stationary at first difference I(1). But no variable should be stationary at second difference I(2).

  7. The speed of convergence in each model can be calculated as (ECt−1)*100. For example, the speed of convergence for the model with product code 341 in Indonesia is 0.40*100 = 40.

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Data availability

The data for the study can be obtained from corresponding author upon request.

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Authors and Affiliations

  1. School of Economics and Management, Southeast University, Jingguan Building, Dongnandaxue Road 2, Jiangning District, Nanjing, 211189, China

    Muhammad Salam

  2. School of Business, Zhengzhou University, Zhengzhou, Henan, China

    Muhammad Zubair Chishti

  3. Department of Economics, University of Chakwal, Chakwal, Punjab, Pakistan

    Muhammad Zubair Chishti

  4. School of Economics, Quaid I Azam University, Islamabad, Pakistan

    Muhammad Zubair Chishti

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  1. Muhammad Salam
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  2. Muhammad Zubair Chishti
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MS conceptualized, conducted the econometric analysis and wrote the original draft. MZC conceptualized, conducted the econometric analysis, wrote the literature review and reviewed the draft.

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Correspondence to Muhammad Zubair Chishti.

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Salam, M., Chishti, M.Z. Will ASEAN countries be a potential choice for the export of pollution intensive goods?. Environ Sci Pollut Res 29, 81308–81320 (2022). https://doi.org/10.1007/s11356-022-21427-z

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