Epsilon Archive for Student Projects

Abstract

This paper investigates the effects of the European Union’s 2021 ban on plastic waste exports to
non-OECD countries. Using bilateral trade data from 2017 to 2023, this study applies a Poisson-Psuedo Maximum Likelihood (PPML) estimator to with various sets of fixed effects to capture the causal effect of the ban. EU exporters, OECD importers, and the post-2021 period capture the regulation’s differential impact. Results suggest a modest, statistically insignificant adjustment in EU exports to OECD countries relative to pre-2021 trade and non-EU exporters, indicating limited redirection of flows under the ban. Standard gravity variables, such as distance and GDP, exhibit expected effects, supporting model robustness. These findings provide nuanced evidence on the trade effects of environmental regulation, illustrating that while the EU ban may shift trade patterns toward OECD countries, the overall impact on bilateral flows is subtle. The study contributes to the literature on environmental trade policies and the evaluation of transboundary waste regulations, offering insights for both researchers and policymakers.