Regional cooperation and the environment: Do "dirty" industries migrate?

This article develops an alternative method to investigate trade in embodie d environmental factor services (EEFS) and applies it to bilateral trade be tween APEC economies. The issue of regional cooperation and the environment is addressed by investigating trade in EEFS between APEC economies in the last three decades. We observe a 'cascading' pattern in net exports of EEFS between East Asian economies. However, we do not observe a similar pattern in the trade between North American economies. The results should be inter preted with caution since the application of US sectoral pollution intensit y data to other countries may lead to biased estimation of trade in EEFS. J EL No. F02, F20, Q28.