Greening Through Trade

69 Pages Posted: 26 Sep 2024

See all articles by Dongmin Kong

Dongmin Kong

School of Economics, Huazhong University of Science and Technology

Chenhao Liu

Peking University - Guanghua School of Management

Wenxu Ye

The Chinese University of Hong Kong, Shenzhen - School of Management and Economics

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Abstract

We investigate the impact of environmental regulations in export destinations on firms' pollution emissions. By utilizing the passage of Permanent Normal Trade Relations by the U.S., which eliminates policy uncertainty regarding tariffs on Chinese exports, we demonstrate that exporting to highly regulated markets reduces smoke, SO2, and waste gas emissions by 0.267%, 0.239%, and 0.026%, and water and coal usage by 0.185% and 0.242%, respectively. Mechanism analysis shows that exporters adapt their practices to meet environmental requirements to participate in the global value chain. Moreover, regional spillover effects exist in cities with more export to highly regulated markets.

Keywords: Export destination, South-North trade, Pollution emission, Resource usage.

Suggested Citation

Kong, Dongmin and Liu, Chenhao and Ye, Wenxu, Greening Through Trade. Available at SSRN: https://ssrn.com/abstract=4968080 or http://dx.doi.org/10.2139/ssrn.4968080

Dongmin Kong (Contact Author)

School of Economics, Huazhong University of Science and Technology ( email )

Bldg. of Econ. School, Louyu Rd. 1037#
HUST, Hongshan Dist.
Wuhan, Hubei 430074
China

Chenhao Liu

Peking University - Guanghua School of Management ( email )

Wenxu Ye

The Chinese University of Hong Kong, Shenzhen - School of Management and Economics ( email )

2001 Longxiang Road, Longgang District
Shenzhen, 518172
China

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