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How Does Green Trade Affect the Environment? Evidence from China

Author

Listed:
  • Huiling Liu

    (School of Economics, Huazhong University of Science and Technology, Wuhan, China)

  • Heng Lei

    (School of Management, Huazhong University of Science and Technology, Wuhan, China)

  • Youcheng Zhou

    (Department of Accounting, Southampton Business School, University of Southampton, Southampton, UK)

Abstract

This study focuses on the impact of trade in environmental goods (green trade) on the environment. We found that green trade can decrease pollution levels by exploiting a panel of 277 Chinese cities from 2004 to 2013 and using the instrumental variable (IV) strategy. However, total trade openness is far less favorable to the environment. We also found that both green imports and exports are conducive to the Chinese environment, while ordinary green trade performs better than green processing trade. Nevertheless, the effects of green trade are restricted by a city's purchasing power and absorptive capacity, as well as the classifications of environmental goods. Furthermore, green trade mainly promotes local green technological progress to benefit the environment.

Suggested Citation

  • Huiling Liu & Heng Lei & Youcheng Zhou, 2022. "How Does Green Trade Affect the Environment? Evidence from China," Journal of Economic Analysis, Anser Press, vol. 1(1), pages 1-19, September.
    • Handle: RePEc:bba:j00001:v:1:y:2022:i:1:p:1-19:d:9
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    References listed on IDEAS

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    Cited by:

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    2. Wang, Mengying & Ren, Siyu & Xie, Guo, 2024. "Going “green trade”: Assessing the impact of digital technology application on green product export," Technology in Society, Elsevier, vol. 77(C).
    3. Muhammad Anas & Wei Zhang & Satar Bakhsh & Liaqat Ali & Cem Işık & Jie Han & Xuemeng Liu & Hamad Ur Rehman & Amjad Ali & Min Huang, 2024. "Moving towards sustainable environment development in emerging economies: The role of green finance, green tech‐innovation, natural resource depletion, and forested area in assessing the load capacity," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(4), pages 3004-3020, August.
    4. Haoqiang Yuan, 2024. "Investigating the Nexus Between Environmental Information Disclosure and Green Development Efficiency: The Intermediary Role of Green Technology Innovation—a PSM-DID Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 11653-11683, September.

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