Research On Environmental Rules And Border Effects

This paper expands the "Double" gravity model proposed by Beharens et al.(2010) through introducing an environment preference.The results of estimation of spatial econometric models indicate that spatial variable coefficient is significant, and the estimated value of the boundary effect is smaller than that of OLS model, which indicating that applying space factor to the field of international trade to capture the "multilateral resistance" is meaningful.Similar to the conclusions of statistical analysis, with the exception of the2008-2009financial crisis period, bounder effect estimates for other years show a downward trend from2003to2012, hich means relative to domestic trade, international trade has been experienced faster development with the reduction of local preferences.Empirical results show that the environmental performance index (EPI),which represents the harshness of the environment variable rules, was significantly and positively correlated with trade flows, which indicates that stricter environmental rules will promote the development of export trade.Manufacturing is re-divided into11sub-sectors for further detailed study. We find that the trend of the border effects in most sub-industries is similar to the overall estimate of the regression. Besides, strict environmental rules have different effects on the exports of various sub-sectors of manufacturing. In general, strict environmental rules will inhibit the export of pollution-intensive industries and promote export of high-end industries.