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Does Environmental Regulation Affect Export Quality? Theory and Evidence from China
Jing Xie1, Qi Sun1, Shaohong Wang1
1School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China.
Environmental regulation enhances export quality in China's manufacturing sector by boosting product quality and productivity. This study reveals the mechanisms and implications for trade and ecological development.
Area of Science:
- Environmental economics
- International trade
- Industrial organization
Background:
- Existing research on environment-trade links lacks a robust theoretical framework.
- This study addresses the gap by developing an analytical framework for export competitiveness focused on product quality.
Purpose of the Study:
- To construct a theoretical mechanism of how environmental regulation influences export quality.
- To empirically investigate the impact of environmental regulation on China's manufacturing export quality and its underlying mechanisms.
Main Methods:
- Development of an analytical framework for export competitiveness based on product quality.
- Empirical examination of environmental regulation's effect on manufacturing export quality in China.
- Analysis of mediating channels: process and product productivity.
Main Results:
- Environmental regulation significantly promotes export quality upgrading in China's manufacturing industry.
- Productivity channels (process and product) mediate this effect, with product productivity having a larger impact, suggesting an innovation offset effect.
- The impact varies by industry: positive for pollution-intensive sectors via product productivity, negative for clean industries via process productivity.
Conclusions:
- Environmental regulation can be a driver of export quality improvement and innovation in manufacturing.
- Policy implications suggest tailored environmental regulations to balance ecological goals with trade competitiveness.
- Findings offer insights for China's pursuit of coordinated ecological civilization and trade power development.
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