Does Trade Policy Uncertainty Exacerbate Environmental Pollution?—Evidence from Chinese Cities

Yiping Sun, Xiangyi Li, Tengyuan Zhang and Jiawei Fu
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Yiping Sun: School of Business Administration, Hubei University of Economics, Wuhan 430205, China
Xiangyi Li: School of Economics and Management, Hubei University of Technology, Wuhan 430068, China
Tengyuan Zhang: School of Business Administration, Zhongnan University of Economics and Law, Wuhan 430073, China
Jiawei Fu: School of Business Administration, Zhongnan University of Economics and Law, Wuhan 430073, China

IJERPH, 2022, vol. 19, issue 4, 1-21

Abstract: Although the relationship between trade and environment has been widely discussed in past studies, trade policy has been in a state of continuous change in recent years. Previous studies have focused on the impact of trade opening or liberalization on the environment, ignoring discussion of the dynamic changes of trade policy. Therefore, it is very important to explore the connection between trade policy changes and environmental pollution for future environmental protection. In order to realize the in-depth study of this mechanism, the paper will try to solve the following three problems: (1) What is the relationship between change in trade policy uncertainty and China’s environmental pollution? (2) What is the mechanism by which trade uncertainty changes environmental pollution? (3) Due to China’s vast territory and regional differences, will changes in trade policy uncertainty have heterogeneous effects due to regional differences? To solve these problems, based on China’s accession to the WTO at the end of 2001, this paper, for the first time, uses PM 2.5 concentration data of 246 prefecture-level cities in China to explore the impact of trade policy uncertainty on China’s environmental pollution, then we make an in-depth analysis of the impact path and heterogeneity of urban spatial distribution and city size. We found that, after China’s accession to the WTO, the growth rate of PM 2.5 concentration reduced in cities with lower trade policy uncertainty and the inhibition effect was different due to the spatial distribution of city size. A further mechanism test shows that reduction in trade policy uncertainty can improve environmental pollution through industrial, structural and technological effects.

Keywords: trade policy uncertainty; regional PM 2.5 concentration; air pollution; China (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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