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Has trade openness reduced pollution in China?

Author

Listed:
  • Sandra PONCET

    (Université de Paris I)

  • Laura HERING

    (FERDI)

  • José DE SOUSA

    (FERDI)

Abstract

We use recent detailed Chinese data on trade and pollution emissions to assess the environmental consequences of China’s integration into the world economy. We rely on a panel dataset covering 235 Chinese cities over the 2003-2012 period to see whether the environmental repercussions from trade openness depend on whether the latter concerns processing or ordinary activities. In line with our theoretical predictions, we find a negative and signicant effect of trade on emissions that is larger for processing trade and activities undertaken by foreign firms: the environmental gains from either ordinary trade activities or domestic firms are much lower, even though these today represent the main drivers of China’s export and import growth. This result suggests some caution regarding pollution prospects in the context of the declining role of processing trade.

Suggested Citation

  • Sandra PONCET & Laura HERING & José DE SOUSA, 2015. "Has trade openness reduced pollution in China?," Working Papers P132, FERDI.
  • Handle: RePEc:fdi:wpaper:2258
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    1. Thais NUNEZ-ROCHA & Inmaculada MARTíNEZ-ZARZOSO, 2018. "Is National Environmental Legislation Affecting Emissions?," LEO Working Papers / DR LEO 2505, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    2. Demena, Binyam Afewerk & Afesorgbor, Sylvanus Kwaku, 2020. "The effect of FDI on environmental emissions: Evidence from a meta-analysis," Energy Policy, Elsevier, vol. 138(C).
    3. Bombardini, Matilde & Li, Bingjing, 2020. "Trade, pollution and mortality in China," Journal of International Economics, Elsevier, vol. 125(C).
    4. Matilde Bombardini & Bingjing Li, 2016. "Trade, Pollution and Mortality in China," NBER Working Papers 22804, National Bureau of Economic Research, Inc.
    5. Afesorgbor, Sylvanus Kwaku & Demena, Binyam A., 2019. "The Effect of Trade on the Environment: Evidence from Meta-analysis," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 291225, Agricultural and Applied Economics Association.

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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