Determinants of trade in recyclable wastes: evidence from commodity-based trade of waste and scrap

Abstract

AbstractThis paper examines factors that affect the trade of recyclable waste in both exporting and importing countries. To this end, we employ two important elements: first, we adopt a gravity model in our empirical methodology; second, we select five waste and scrap commodities and undertake estimations using commodity-level trade data. We demonstrate that, the higher the wage/per capita GDP/population of an importing country, the more recyclable wastes it imports. This result suggests that the demand for final goods and, accordingly, the demand for materials including recycled material, have strong effects on the import volume of recyclable waste. Moreover, this implies that the imports of a developing country from developed countries increase with expanding industrial activity and economic growth. We find no evidence for a pollution haven for wastes and recycling.