Environmental regulation and firm exports: New evidence from the distance to local ecological environment bureau

Baoqing Tang, Danni Chen, Jing Ma and Siyuan Xuan

International Review of Economics & Finance, 2025, vol. 101, issue C

Abstract: This paper provides new evidence about the impact of environmental regulation on firm exports. We exploit firms' distance to the local ecological environment bureau. More specifically, the exposure to environmental regulation is different across firms with different distances to the local bureau. After China's Key Cities for Air Pollution Control policy was introduced, firms located farther from the local bureau experienced stricter environmental regulations. We find that firms experiencing stricter environmental regulation export less. This effect is primarily driven by the increased costs associated with complying with environmental regulations. Moreover, the impact of environmental regulation on exports varies based on financial constraints, pollution intensity, firm ownership, and trade modes.

Keywords: Environmental regulation; Firm export; Distance; KCAPC policy (search for similar items in EconPapers)
JEL-codes: F14 F18 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:101:y:2025:i:c:s1059056025003272

DOI: 10.1016/j.iref.2025.104164

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