International Trade and the Environment: A Theory of Ecologically Beneficial Exchange, 1990–2020

ABSTRACT Objective I develop and propose a theory of ecologically beneficial exchange, which argues that exports from less‐developed countries (LDCs) to high‐income countries (HICs) reduce carbon emissions in the former. Methods I test the theory using two‐way fixed estimation of expansive cross‐national, longitudinal data on over 100 developing countries from 1990 to 2020. Results Results provide empirical support for the proposed theory of ecologically beneficial exchange. Conclusions This study shows theoretically and empirically how global political–economic dynamics may improve the environment in developing countries.