Environmental Regulation and Exports: Evidence from the Comprehensive Air Pollution Policy in China

Hong Chen and Yang Xu
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Hong Chen: Economics and Management School, Wuhan University, Wuhan 430072, China
Yang Xu: Economics and Management School, Wuhan University, Wuhan 430072, China

IJERPH, 2021, vol. 18, issue 3, 1-11

Abstract: The impact of environmental regulation has been an important topic. Based on the Chinese Custom Database and China City Statistical Yearbook, this paper investigates the effect of environmental regulation on export values and explores potential mechanisms and heterogeneous effects. Taking advantage of China’s first comprehensive air pollution prevention and control plan, the Air Pollution Control in Key Zones policy, as a quasi-natural experiment, we employ the difference-in-differences method to examine the causal relationship between environmental regulation and exports. We find the statistically significant and negative effect of environmental regulation on exports at the city level. Moreover, we find that the potential mechanism is the change in export values caused by firm entry and exit, especially by exiters, rather than the change in the number of exporting firms in the city caused by firm entry and exit. In addition, we find the heterogeneous effects of environmental regulation based on the differences of environmental policy across cities and the Broad Economic Categories classification.

Keywords: environmental regulation; air pollution policy; export; pollution haven effect; China (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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