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Trade Liberalization, Transboundary Pollution, and Market Size

机译：贸易自由化，越境污染和市场规模

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This paper uses a monopolistic competitive framework to study the impact of trade liberalization on local and global emissions. We focus on the interplay of asymmetric emission taxes and the home market effect and show how a large-market advantage can counterbalance a high emission tax, so that trade liberalization leads firms to move to the large high-tax economy. Global emissions decrease when trade is liberalized in this case. We then simulate the model with endogenous taxes. The larger country, which has the advantage of the home market effect, will be able to set a higher Nash emission tax than its smaller trade partner yet still maintain its manufacturing base. As a result, a pollution haven will typically not arise in this case as trade is liberalized. However, global emissions increase as a result of international tax competition, which underscores the importance of international cooperation as trade becomes freer.
机译：本文使用垄断竞争框架来研究贸易自由化对本地和全球排放的影响。我们关注不对称排放税与国内市场效应之间的相互作用，并说明大市场优势如何抵消高排放税，从而贸易自由化使企业转向大型高税收经济。在这种情况下，如果贸易自由化，全球排放量就会减少。然后，我们使用内生税收对模型进行仿真。拥有国内市场效应优势的大国将能够设定比其较小贸易伙伴更高的纳什排放税，同时仍保持其制造基础。结果，在这种情况下，随着贸易的自由化，通常不会出现污染天堂。但是，由于国际税收竞争，全球排放量增加，这凸显了随着贸易变得更加自由，国际合作的重要性。

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