The Research On Effect Of Environmental Regulation To China’s Export Trade

China’s export trade has developed rapidly since been a member of WTO, which has contributed a lot to its economy’s high-speed growth rate. However, with the rapid expansion of foreign trade, the environment pollution we face is becoming more and more seriously. The disadvantages which tradional extensive and resource consumption developing type bring are increasing day by day, making the contradiction between industial development and environment protection is increasingly prominent. On the other hand, development countries has been raising their threshold of market admittance, which has limited the export trade of developing countries. Taking advantage of active and reasonable environmental regulation to limit export trade’s negative externalities is on the corner. In this backgrond, we do our study deeply in both theoretical and empirical aspect, to find out what effect may environmental regulation leads to the heterogeneity of export trade in different industries of China.In the aspect of theoretical study, this paper analyzes the mechanism and effect which environmental regulation brings to export trade in three angles: environmental cost, technological innovation and industrial structure. The result shows that environmental regulation will increase the production cost, lessen the productivity, and consenquently decline the export value when analysising in static mode. Nevertheless, if we put environmental regulation and export trade in a dynamic situation, appropriate environmental regulation will promote export trade due to the appearance of technological innovation and update of industrial structure. Basing on this conclusion, we establish two empirical models to estimate the real impact which environmental regulation of the whole manufacturing industy and mild, moderate, severe pollutive industry brings to its export trade. The first model only treat environmental regulation stringency as its explanatory variable in order to observe the impact on its own, while the second model brings in the cross term of environmental regulation stringency and export trade so as to verify whether environmental regulation influences export trade indirectly by changing its productivity. The main results are as follows:(a)Manufacturing industies effect their export trade indirectly by changing productivity except severe pollutive industies.(b) The effect which environmental regulation leads to export trade has significant industral heterogeneity. Relationship between mild and moderate pollutive industry’s environmental regulation and export trade shows an “U” curve, while severe pollutive industry’s shows an inverted “U” curve.(c) Effect of manufacturing industy’s traditional influence factors also reveal their industral heterogeneity. The influnence factor and effect of each industry is different, which needs to be treated differently.