Determinants of Trade in Recyclable Wastes between Developing and Developed Countries

This paper examines the trade volume of recyclable wastes. In particular, we analyze the trade from developed countries to developing countries. The reason is that, when a recycling process is separated from the production process of final goods or/and the consumption process, it would be located in the labor-abundant (i.e., less developed developing) countries. Then, the environmental and health problems might become serious in developing countries. The relationship between the wages and the volume of imports is our focus. We demonstrate that, the higher the wage/per capita income of a developing country, the more recyclable wastes it imports. This implies that there is no evidence for a pollution haven in the sense that the dirty recycling sectors expand in the less developed developing countries more rapidly than the more developed developing countries. Furthermore, we discuss the possibility that the trade restriction for reducing environmental damage is accompanied by a significant loss in efficiency.