The Impact Of Environmental Regulation On Chinese Firm Exports

For a long time,there is no consistent conclusion on the impact of environmental regulation on export,while accurate assessment of the impact of environmental regulation on export trade,especially on firm exports,is undoubtedly of great significance to the design of environmental regulation mechanism and the adjustment of trade policies,which are for a win-win situation of improving environmental quality and promoting the growth of import and export.Taking the implementation of the mandatory cleaner production audit(MCPA)as a quasi-natural experiment,this paper uses the China’s firm-level data from 2004 to 2012 to study the impact of environmental regulation on firm exports through the difference-in-differences method.It is found that the implementation of the MCPA has a significant negative impact on firm exports.In addition,in the later stage of the implementation of the MCPA,the evaluation and audit standards and implementation process are more detailed,and the laws and regulations are more perfect.The negative impact of the MCPA on firm exports in this stage is stronger than that in the earlier stage.Therefore,the promulgation of more perfect laws and regulations and the establishment of more detailed implementation standards and processes are necessary for the effect of environmental regulations.After that,this paper conducts a series of robustness tests,including the setting of baseline regression equation,placebo test,adjusting the matching proportion of PSM,excluding other external shocks,adjusting the time when firms regulated by the environmental regulation,and applying Heckit model.The results of all above robustness tests are consistent with the estimation results of baseline regression.Furthermore,through the Heckit model,this paper finds that the negative impact of the MCPA on firm exports is mainly caused by inhibiting the expansion of the scale of firm exports rather than hindering firms from entering the export market.In the examination of firm heterogeneity,it is found that the impact of the MCPA on different types of firms is different: state-owned firms,large-scale firms and firms located in the central and western regions are less vulnerable to the negative impact of the environmental regulation,while firms in industries with high pollution intensity and low technology intensity are more vulnerable to the negative impact of the environmental regulation.In the examination of mechanism,this paper finds that the MCPA significantly improves the fixed and variable costs of firms,which provides relevant evidence for the negative impact of the MCPA on firm exports through the "cost of compliance" effect.In addition,although participating in the MCPA is easier to obtain government subsidies for firms,subsidies can not eliminate the negative impact of "cost of compliance" on firms.Finally,the study finds that the MCPA also significantly inhibited the improvement of firm productivity,which shows that the "cost of compliance" caused by environmental regulations has occupied the production and innovative investment of firms."Porter Hypothesis" is not tenable at the current stage in China.Therefore,in the practice of environmental regulations,China should increase the subsidies and financing support for related firms,and promote firms to take the road of innovation and high-quality development in order to achieve a win-win situation of environmental quality improvement and export growth.