Reports
Discussion Papers
No.282 Does Quality Matter in the Iron and Scrap Trade?
by MICHIDA Etsuyo , Cemal Atici, and KOJIMA Michikazu
March 2011
ABSTRACT
This paper sheds light on the iron and steel (IS) scrap trade to examine how economic development affects the quality demanded of recyclable resource. A simple model is presented that show a mechanism of how scrap quality impacts the direction of trade due to comparative advantage. We find that economic development in both importing and exporting countries has a positive effect on the quality of traded recyclables. Developed countries that intend to improve the domestic recovery of recyclables should raise the quality of separating recyclables while developing countries should tighten environmental regulations to help decrease the import of recyclables that cause pollution.
Keywords: iron and steel, scrap, environment, trade
JEL classification: F18, O13
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