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ons of increasing imports.

Measure to reduce the imports.

Literature Review

(Hertwich, 2006) This article primarily focuses on indirect environmental impacts associated with production.

Indirect household environmental impacts (HEI) caused by production processes which are often determined by using input, output analysis. Unfortunately, most studies of HEI have assumed that imports are produced with local technology. This can result in large errors, that Norwegian imports are produced with local technology underestimates some environmental impacts by up to an order of magnitude. Input output studies focused on the correct treatment of imports and analyses household consumption. Way to estimate HEI correctly is by multiregional input output analysis. Multiregional input output analysis is mostly used for regional economic studies within a country and more recently for determining environmental impacts of international trade. A key feature of these models is the ability to use explicit regional technologies to estimate pollution embodied in imports. Norway is interesting for studies of energy and pollution embodied in imports because of Norway’s high proportion of imports also because most of its domestic electricity is supplied by hydropower. Consequently, relative to domestic production, Norwegian imports are probable to have a high degree of embodied pollution. Because of its exclusive economic structure, a study focusing on Norway is likely to focus the importance of considering pollution embodied in imports and show the value in studying the environmental implications of international production networks. The results of study state that most countries with high proportion of imports and relatively clean electricity generation with have a significant portion of pollution embodied in imports. Given these points it is probable that even including further detail on developing countries, the impacts of developing countries will remain significant.

(Sherman Robinson, 2010) This paper studies the impact of service sector trade liberalization on the world economy by a ten region, eleven sector CGE model with import embodied technology transfer from developed countries to developing countries. Simulation results demonstrate that service sector trade liberalization not only directly affects world service production and trade, but also has significant implications for other sectors in the economy. The significant channel of the impact is through inter industry input output relations and TEP growth induced from services imported by developing countries from developed countries which may be embodied with new information and advanced technology.

(Keller) In this paper total factor productivity differences across countries are elaborated in terms of domestic technical change and international technology transfer. Research and development expenditure is the major input in technical change, generating knowledge that has both private and social returns. Past innovative efforts benefit today’s inventors and today’s inventions create externalities, or spillovers, for producers in the future. We study international technology transfer with the help of research and development spillovers in sixteen countries’ manufacturing industries since the early 1970s.

The analysis shows that the productivity effect of international technology transfer often exceed