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Environmental policy and exports: Evidence from Chinese cities

Listed author(s):
  • Laura Hering

    (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne)

  • Sandra Poncet

    (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

We study environmental regulation and its role for trade in China. Specifically, we assess the effectiveness of an environmental policy in China that introduced stricter regulations on sulfur dioxide (SO2) emissions in targeted cities. To identify the causal effect of this policy on exports, we use sectoral export data for a panel of Chinese cities and exploit variations in exports between cities and sectors, over time, and, in a second step, between firm types. We find a relative fall in sectoral exports in targeted cities after the implementation of the policy, which is sharper the more polluting the industry. Further, we find that the observed effect is mainly driven by privately owned firms, whereas exports of state-owned firms seem to be unaffected by the new policy. This finding is consistent with the preferential political treatment of state-owned firms in China.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-01162230.

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Date of creation: Sep 2014
Publication status: Published in Journal of Environmental Economics and Management, Elsevier, 2014, 68 (2), pp.296-318. <10.1016/j.jeem.2014.06.005>
Handle: RePEc:hal:cesptp:hal-01162230
DOI: 10.1016/j.jeem.2014.06.005
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01162230
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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