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Empirical analyses that rely on micro-level panel data have found that exporters are generally less pollutant than non-exporters. While alternative explanations have been proposed, firm-level data has not been used to examine the role of destination markets behind the relationship between exports and pollution. In this paper, we argue that because consumers in high-income countries have higher valuations for clean environments than consumers in developing countries, exporters targeting high-income countries are more likely to improve their environmental outcomes than exporters targeting destinations where valuations for the environment are not high. Using a panel of firm-level data from Chile we find support to this hypothesis. A 10 percentage point increase in the share of exports to high-income countries is associated with a reduction in CO2 pollution intensity of about 16%. The results have important implications for firms in developing countries aiming to target high-income markets. [ABSTRACT FROM AUTHOR]

Abstract: This paper contributes to the literature that analyses the determinants and measurement of Technological Capabilities (TCs) with empirical evidence on Argentina, Brazil and Chile. Based on the World Bank''s Investment Climate database, the study covers firms from the manufacturing sector. We first construct a Capability Score to provide a preliminary measure of Technological Capabilities at the firm level. We then test it econometrically to explore the determinants of TCs and exports and evaluate their reciprocal relationship through a Two Stage Probit. Our results show that exports and TCs significantly and positively influence each other in some of these countries. [Copyright &y& Elsevier]