Free Trade and Haze Control: The Impact of Pilot Free Trade Zone Policy on Haze Pollution

Zhanheng Ji and Qianting Zhu ()
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Zhanheng Ji: School of Economics and Management, China University of Petroleum at Beijing, Beijing 102249, China
Qianting Zhu: School of Economics and Management, China University of Petroleum at Beijing, Beijing 102249, China

Sustainability, 2024, vol. 16, issue 23, 1-16

Abstract: As a new window for opening up in the new era, whether the China Free Trade Pilot Zones (PFTZs) can effectively balance urban economic development and environmental sustainability remains a topic that warrants further exploration. This study employs the PFTZ policy as a quasi-natural experiment and constructs a difference-in-differences model to empirically investigate the impact and mechanism of the PFTZ policy on haze pollution using city-level data from 2005 to 2020 in China. The study finds that: (1) the PFTZ policy significantly reduces haze pollution, and the results remain robust using the historical opening of treaty ports as an instrumental variable; (2) the PFTZ policy reduces haze pollution through the learning effect, demonstration effect, and agglomeration effect; and (3) the haze reduction effect of PFTZs is particularly pronounced inland and in areas with high public environmental awareness. The results directly address the key question of whether the PFTZ policy can foster sustainable economic development. It provides empirical evidence on how the PFTZ policy balances environmental sustainability and economic growth and draws policy recommendations for formulating more sustainable development strategies.

Keywords: pilot free trade zone; haze pollution; green technology innovation; environmental regulation; industrial agglomeration (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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