Blame the Foreigners? Exports and Sulfur Dioxide Emissions in China

38 Pages Posted: 22 Mar 2021 Last revised: 3 Aug 2021

See all articles by Zheng Wang

Zheng Wang

De Montfort University; GEP, University of Nottingham

Date Written: March 20, 2021

Abstract

This paper provides an overhaul of the contribution of exports to industrial sulfur dioxide (SO2) emissions in Chinese cities. My estimation strategy exploits the import demand shocks of export destination markets (net of their demand for Chinese products) as a plausibly exogenous source of variation in the cities' exports. The baseline results show that a 10 percentage-point increase in export shock (weighted by the exporting industry's relative emission intensity) leads to a 1.6 percentage-point rise in SO2 emissions, equivalent to a 635-ton increase per year for an average Chinese city. This estimate remains qualitatively stable to an array of robustness checks by accounting for: alternative controls for production for domestic sales shocks, the city market share in global trade, and the influence of a lagged impact of foreign demand shocks. Tentative evidence also suggests that production for exports does not contribute to nationwide emission intensity drop. A further anatomy shows with weak evidence that foreign-owned firms and deeper contractual links with the global production network could play a positive role in reducing the environmental footprint of industrial activities.

Keywords: Trade, pollution, environmental regulation, China

JEL Classification: F18, F64, Q53, Q56

Suggested Citation

Wang, Zheng, Blame the Foreigners? Exports and Sulfur Dioxide Emissions in China (March 20, 2021). Available at SSRN: https://ssrn.com/abstract=3808838 or http://dx.doi.org/10.2139/ssrn.3808838

Zheng Wang (Contact Author)

De Montfort University ( email )

Department of Economics and Marketing
The Gateway
Leicester, LE1 9BH
United Kingdom

HOME PAGE: http://zhengwang.weebly.com/

GEP, University of Nottingham ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

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