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Mandatory pollution abatement and firm export product quality

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  • Xiong, Mengxu
  • Zhu, Ling

Abstract

This study investigates the effect of mandatory pollution abatement on the export product quality of firms. Using the chemical oxygen demand reduction targets specified in the 11th Five-year Plan of China as an exogenous shock, we document that firms under stringent environmental regulation experience an upgrading in their export product quality, and our findings remain robust under a battery of tests. Plausible mechanisms are reduced wastewater emissions, the adoption of sewage treatment facilities, and promoted innovation. We show that the effect is highly pronounced in non-state-owned enterprises and firms located in downstream cities. Our findings provide policy implications on unintended consequences of environmental regulation on local firms’ product quality.

Suggested Citation

  • Xiong, Mengxu & Zhu, Ling, 2023. "Mandatory pollution abatement and firm export product quality," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1-12.
    • Handle: RePEc:eee:ecanpo:v:80:y:2023:i:c:p:1-12
    DOI: 10.1016/j.eap.2023.07.013
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    References listed on IDEAS

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    Cited by:

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    2. Xiangxia Liu & Shen Liu, 2024. "Green Technology Innovation, Capital-Factor Allocation, and Manufacturing-Export Resilience," Sustainability, MDPI, vol. 16(3), pages 1-20, February.

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