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Environmental policy and exports: Evidence from Chinese cities


  • Laura Hering

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

  • Sandra Poncet

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

Suggested Citation

  • Laura Hering & Sandra Poncet, 2014. "Environmental policy and exports: Evidence from Chinese cities," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01162230, HAL.
  • Handle: RePEc:hal:cesptp:hal-01162230
    DOI: 10.1016/j.jeem.2014.06.005
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    References listed on IDEAS

    1. David Dollar & Shang-Jin Wei, 2007. "Das (Wasted) Kapital; Firm Ownership and Investment Efficiency in China," IMF Working Papers 07/9, International Monetary Fund.
    2. Wang, Hua & Wheeler, David, 2005. "Financial incentives and endogenous enforcement in China's pollution levy system," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 174-196, January.
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    Cited by:

    1. Gourdon, Julien & Monjon, Stéphanie & Poncet, Sandra, 2016. "Trade policy and industrial policy in China: What motivates public authorities to apply restrictions on exports?," China Economic Review, Elsevier, vol. 40(C), pages 105-120.
    2. repec:gam:jsusta:v:9:y:2017:i:7:p:1247-:d:104856 is not listed on IDEAS
    3. repec:eee:enepol:v:109:y:2017:i:c:p:884-897 is not listed on IDEAS
    4. repec:gam:jsusta:v:9:y:2017:i:6:p:872-:d:99388 is not listed on IDEAS
    5. Pedro Naso & Yi Huang Author Name: Tim Swanson, 2017. "The Porter Hypothesis Goes to China: Spatial Development, Environmental Regulation and Productivity," CIES Research Paper series 53-2017, Centre for International Environmental Studies, The Graduate Institute.
    6. Teng Ma & Kenji Takeuchi, 2016. "Controlling SO2 emissions in China: A panel data analysis of the 11th Five-Year Plan," Discussion Papers 1609, Graduate School of Economics, Kobe University.
    7. Shuddhasattwa Rafiq & Ingrid Nielsen & Russell Smyth, 2016. "Effect of Internal Migration on Air and Water Pollution in China," Monash Economics Working Papers 27-16, Monash University, Department of Economics.
    8. repec:eee:eneeco:v:64:y:2017:i:c:p:31-44 is not listed on IDEAS
    9. Wu, Haoyi & Guo, Huanxiu & Zhang, Bing & Bu, Maoliang, 2017. "Westward movement of new polluting firms in China: Pollution reduction mandates and location choice," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 119-138.

    More about this item


    environmental policy; export performance; China;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • 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


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