Interrelationship between international trade and environmental performance: Theoretical approaches and indicators for sustainable development

In recent years, a great deal of research has analyzed the impact of trade openness on the environment, with the aim of determining whether internationalization contributes to the improvement of environmental performance (EP) or, on the contrary, hinders the achievement of sustainable development. The objective of the present work is to conduct a systematic literature review on the interrelationship between international trade and EP at the micro- and macroeconomic levels, analyzing the existent theoretical approaches and the EP indicators utilized in practice. The most prominent theories found are firm heterogeneity, at a microeconomic level, and the pollution haven/halo hypotheses, at a macroeconomic level. Also, the EP indicators have been classified according to five dimensions: energy consumption, resource consumption, emissions, risk potential, and toxic potential, of which pollutant gas emissions and energy consumption are the most used. The results obtained show evidence of the interrelationship mentioned from the perspective of the different theories. In addition, this analysis helps to identify several gaps in this line of study.