IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v101y2025ics1059056025003272.html

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

Author

Listed:
  • Tang, Baoqing
  • Chen, Danni
  • Ma, Jing
  • Xuan, Siyuan

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.

Suggested Citation

  • Tang, Baoqing & Chen, Danni & Ma, Jing & Xuan, Siyuan, 2025. "Environmental regulation and firm exports: New evidence from the distance to local ecological environment bureau," International Review of Economics & Finance, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:reveco:v:101:y:2025:i:c:s1059056025003272
    DOI: 10.1016/j.iref.2025.104164
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025003272
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2025.104164?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Jing Xie & Qi Sun & Shaohong Wang & Xiaoping Li & Fei Fan, 2020. "Does Environmental Regulation Affect Export Quality? Theory and Evidence from China," IJERPH, MDPI, vol. 17(21), pages 1-23, November.
    2. Yajun Zhu & Churen Sun & Hui Jiang & Qing Qin, 2023. "Cleaner production regulation and firms’ ratio of domestic value added in exports: evidence from China’s cleaner production standards," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 32(7), pages 1186-1213, October.
    3. Elrod, Aaron A. & Malik, Arun S., 2017. "The effect of environmental regulation on plant-level product mix: A study of EPA's Cluster Rule," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 164-184.
    4. Huayun Zhai & Danlan Liu & Kam C. Chan, 2019. "The Impact of Environmental Regulation on Firm Export: Evidence from China’s Ecological Protection Red Line Policy?," Sustainability, MDPI, vol. 11(19), pages 1-13, October.
    5. Zhenyu Jiang & Zongjun Wang & Yanqi Zeng, 2020. "Can voluntary environmental regulation promote corporate technological innovation?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 390-406, February.
    6. Liu, Donghua & Ren, Shenggang & Li, Wenming, 2022. "SO2 emissions trading and firm exports in China," Energy Economics, Elsevier, vol. 109(C).
    7. Mu, Xiuzhen & Zhan, Qilin & Zeng, Xiaohui, 2024. "Can friend-shoring policies improve export resilience? A study based on the Belt and Road initiative," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    8. Akbostanci, Eli̇f & Tunç, G. İpek & Türüt-Aşik, Serap, 2007. "Pollution haven hypothesis and the role of dirty industries in Turkey's exports," Environment and Development Economics, Cambridge University Press, vol. 12(2), pages 297-322, April.
    9. Hui Deng & Chuang Li & Liping Wang, 2022. "The Impact of Corporate Innovation on Environmental Performance: The Moderating Effect of Financing Constraints and Government Subsidies," Sustainability, MDPI, vol. 14(18), pages 1-18, September.
    10. Zhang, Yan & Cui, Jingbo & Lu, Chenghao, 2020. "Does environmental regulation affect firm exports? Evidence from wastewater discharge standard in China," China Economic Review, Elsevier, vol. 61(C).
    11. Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 755-787.
    12. Jan F. Weiss & Tatiana Anisimova, 2019. "The innovation and performance effects of well-designed environmental regulation: evidence from Sweden," Industry and Innovation, Taylor & Francis Journals, vol. 26(5), pages 534-567, May.
    13. Chakraborty, Pavel & Chatterjee, Chirantan, 2017. "Does environmental regulation indirectly induce upstream innovation? New evidence from India," Research Policy, Elsevier, vol. 46(5), pages 939-955.
    14. Jevan Cherniwchan & Nouri Najjar, 2022. "Do Environmental Regulations Affect the Decision to Export?," American Economic Journal: Economic Policy, American Economic Association, vol. 14(2), pages 125-160, May.
    15. Hong Chen & Yang Xu, 2021. "Environmental Regulation and Exports: Evidence from the Comprehensive Air Pollution Policy in China," IJERPH, MDPI, vol. 18(3), pages 1-11, February.
    16. Xiaobing Huang & Xiaolian Liu, 2019. "The Impact of Environmental Regulation on Productivity and Exports: A Firm-Level Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(11), pages 2589-2608, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Ruochen & Wen, Shuyang & Xue, Shuyu, 2026. "Risk as opportunity: The incentive effect of green finance policy on risk-taking of energy firms," Energy, Elsevier, vol. 344(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Qin & Wang, Ying, 2025. "What shapes export competitiveness of home country firms? Host country environmental regulations or labor standards," International Review of Financial Analysis, Elsevier, vol. 103(C).
    2. Han Zou, 2024. "Environmental regulation, corporate strategy and trade costs: a regression discontinuity in time design," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(5), pages 12163-12191, May.
    3. Liang Ding & Yingna Wu & Yuetong Ma & Li Zhang, 2022. "Environmental Regulation and the Innovation Performance of Chinese Export Firms: A Quasi-Natural Experiment based on the Law of Promoting Cleaner Production," SAGE Open, , vol. 12(4), pages 21582440221, October.
    4. Ren, Shenggang & Yang, Xuanyu & Hu, Yucai & Chevallier, Julien, 2022. "Emission trading, induced innovation and firm performance," Energy Economics, Elsevier, vol. 112(C).
    5. Yongfu Liu & Shuai Guan, 2023. "The Impact of Environmental Regulation on the Upgrading of Urban Industrial Structure: A Quasi-Natural Experiment Based on the Two Control Zones Policy," Sustainability, MDPI, vol. 15(18), pages 1-17, September.
    6. Ying She & Yaobin Liu & Yangu Deng & Lei Jiang, 2020. "Can China’s Government-Oriented Environmental Regulation Reduce Water Pollution? Evidence from Water Pollution Intensive Firms," Sustainability, MDPI, vol. 12(19), pages 1-19, September.
    7. Yang, Zhihao & Hong, Junjie, 2021. "Trade policy uncertainty and energy intensity: Evidence from Chinese industrial firms," Energy Economics, Elsevier, vol. 103(C).
    8. Fozia Latif Gill & K Kuperan Viswanathan & Mohd Zaini Abdul Karim, 2018. "The Critical Review of the Pollution Haven Hypothesis (PHH)," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 167-174.
    9. Jiang, Jiatong & Pei, Jiansuo & Zhang, Meng, 2024. "Green credit and firms’ span of global production stages," China Economic Review, Elsevier, vol. 87(C).
    10. Wen Jun & Muhammad Zakaria & Syed Jawad Hussain Shahzad & Hamid Mahmood, 2018. "Effect of FDI on Pollution in China: New Insights Based on Wavelet Approach," Sustainability, MDPI, vol. 10(11), pages 1-20, October.
    11. Xuefei Zhao & Biyi Zhou & Qianling Zhou, 2025. "The Impact of Environmental Incentive Policies on the Value of New Energy Enterprises—Evidence from China’s New Energy Demonstration Cities," Sustainability, MDPI, vol. 17(19), pages 1-35, September.
    12. Shahbaz, Muhammad & Khraief, Naceur & Uddin, Gazi Salah & Ozturk, Ilhan, 2014. "Environmental Kuznets curve in an open economy: A bounds testing and causality analysis for Tunisia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 325-336.
    13. Liu, Donghua & Ren, Shenggang & Li, Wenming, 2022. "SO2 emissions trading and firm exports in China," Energy Economics, Elsevier, vol. 109(C).
    14. Myeong Hwan Kim & Nodir Adilov, 2012. "The lesser of two evils: an empirical investigation of foreign direct investment-pollution tradeoff," Applied Economics, Taylor & Francis Journals, vol. 44(20), pages 2597-2606, July.
    15. Xin Liu & Zhiyong Kang, 2022. "Environmental Policy and Exports in China: An Analysis Based on the Top 10,000 Energy-Consuming Enterprises Program," Sustainability, MDPI, vol. 14(21), pages 1-16, October.
    16. Xiangmin He & Jianhua Zhou, 2025. "Front-End Environment Regulation, Heterogeneous FDI Spillover, and the Firm’s Green Global Value Chains Upgrading," SAGE Open, , vol. 15(3), pages 21582440251, August.
    17. Jevan M. Cherniwchan & M. Scott Taylor, 2022. "International Trade and the Environment: Three Remaining Empirical Challenges," NBER Working Papers 30020, National Bureau of Economic Research, Inc.
    18. Jevan Cherniwchan & Nouri Najjar, 2025. "Free Trade and the Formation of Environmental Policy: Evidence from US Legislative Votes," American Economic Journal: Economic Policy, American Economic Association, vol. 17(2), pages 224-258, May.
    19. Hamaguchi, Yoshihiro, 2023. "Environmental tax evasion as a determinant of the Porter and pollution haven hypotheses in a corrupt political system," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 610-633.
    20. Xie, Yu & Wu, Desheng & Li, Xiaoyan & Tian, Suhua, 2023. "How does environmental regulation affect productivity? The role of corporate compliance strategies," Economic Modelling, Elsevier, vol. 126(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:101:y:2025:i:c:s1059056025003272. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.