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Impact of Environmental Regulation on Firm Exports: Evidence from a Quasi-Natural Experiment in China

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  • Guanglai Zhang
  • Wenmei Liao
  • Yayun Ren
  • Yantuan Yu

Abstract

To estimate the short term effect of environmental regulation on firm exports, this study considers China’s 2003 City Air Pollution Prevention and Control Program (CAPPCP) in a quasi-natural experiment with microdata from 2000–2007. Using the difference-in-differences (DID) and matching DID methods, our findings indicate that CAPPCP reduced firm exports by 6.2% and 12.3%, respectively. A mechanism analysis examines the three channels through which CAPPCP affects firm exports: total factor productivity, production costs, and factor endowments. Furthermore, a heterogeneity analysis reveals that non-state-owned firms, small-scale firms, and firms in highly polluting industries have stronger negative responses to environmental regulations.

Suggested Citation

  • Guanglai Zhang & Wenmei Liao & Yayun Ren & Yantuan Yu, 2023. "Impact of Environmental Regulation on Firm Exports: Evidence from a Quasi-Natural Experiment in China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(2), pages 363-375, January.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:2:p:363-375
    DOI: 10.1080/1540496X.2022.2103400
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    Cited by:

    1. Guohao Song & Chunlin Ding, 2024. "How Do Local Environmental Regulations Affect the Export Technological Complexity of Enterprises?," Sustainability, MDPI, vol. 16(17), pages 1-16, September.

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