Environmental Regulation and Export Performance: Evidence from the USA

This paper uses a difference-in-differences approach to analyze the performance of US exports of environmentally sensitive goods (ESGs) relative to non-ESGs for the years from 1979 to 2014. This period witnessed a steady expansion of the volume of US trade and a major environmental federal policy initiative in the form of the 1990 Clean Air Act amendment. We investigate the effect of this initiative on trade in various sectors. The results show that export shares performance of ESGs in sectors such as crude materials and mineral fuels and manufacturing improved vis-à-vis non-ESGs after 1990 while it worsened for environmentally sensitive chemical goods.