International factor mobility and environment in a dual agricultural economy

The purpose of this study is to investigate the influences that international factor movements have on the environment in developing country under agricultural dualism. By using a general equilibrium model that incorporates a modern agricultural sector in different stages, we analyse the effects of international factor movements on the environment. At the beginning of the modern agricultural sector, international labour movement has no influence on the environment; if the modern agricultural capital share in the economy increases to a certain level, international capital inflow improves the environment in the developing countries whereas international capital outflow harms the environment, otherwise, international capital inflow harms the environment whereas international capital outflow improves the environment. However, after the popularization of modern agriculture, international labour movement and international capital movement affect the environment in the same direction: factor inflow harms the environment, whereas outflow improves the environment. Thus, it is possible for the international factor movement be compatible with the environmental protection in a developing country.