Does Environmental Regulation Affect Export Quality? Theory and Evidence from China

Jing Xie, Qi Sun, Shaohong Wang, Xiaoping Li and Fei Fan
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Jing Xie: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Qi Sun: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Shaohong Wang: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Xiaoping Li: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Fei Fan: Institute of Central China Development, Wuhan University, Wuhan 430072, China

IJERPH, 2020, vol. 17, issue 21, 1-23

Abstract: Most studies focus on the empirical investigation of the relationship between environment and trade, but they lack a systematic theoretical framework. To fill this gap, this study constructs an analytical framework of export competitiveness from the perspective of product quality, and reveals the theoretical mechanism of environmental regulation affecting export quality. We empirically examine the impact of environmental regulation on the export quality of China’s manufacturing industry, as well as its possible mechanism. Our findings show that environmental regulation can significantly promote the export quality upgrading of the manufacturing industry and that process and product productivity are two possible channels through which such regulation affects export quality, although their mediating effects are in opposite directions. The mediating effect of product productivity is greater than that of process productivity, indicating that environmental regulation mainly has an innovation offset effect on China’s manufacturing industry. For pollution-intensive industries, environmental regulation plays a significant promoting role through the channel of product productivity, but, for clean industries, environmental regulation has an inhibitory effect through the channel of process productivity. These findings provide important enlightenment for the coordinated development of China’s ecological civilization and trade power.

Keywords: environmental regulation; export quality; quality upgrading; process productivity; product productivity (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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