The Effects of Environmental Regulation on Exporters’ Exiting Behavior: The Evidence From China

Tu, Dongmei; Yao, Li; Zeng, Yong

doi:10.1142/s0217590817470014

Cited by 6 publications

(3 citation statements)

References 22 publications

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“…Albrizio et al (2014) also found no evidence for the same while studying the effects of tightening of environmental policy on Productivity growth, neither at the industrial level nor at the country level in OECD countries for dirty goods. As far as export exit behavior is concerned, Tu et al (2019) using DID method examined China's industrial firms and found no significant evidence of stricter regulation causing exporters to exit. To date, the studies regarding the impact of stringent environmental regulations on different sectors have provided inconsistent results, leaving the matter still open to varied interpretations.…”

Section: Literature Reviewmentioning

confidence: 99%

Environmental policy stringency and comparative advantage of environmental sensitive goods: a study of textile exports in G20 countries

Mahajan

Majumdar

2021

BIJ

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PurposeTextile, listed as one of the highly environmentally sensitive goods, its trade is susceptible to be influenced by the implementation of stringent environmental policies. This paper aims to investigate the long-run relationship between revealed comparative advantage (RCA) and Environmental Policy Stringency Index (EPSI) for textile exports of G20 countries in panel data setup.Design/methodology/approachApart from trend analysis, the authors have employed Pedroni and Westerlund panel cointegration method and fully modified ordinary least square (FMOLS) method to study the long-run relationship between RCA and EPSI in presence of cross-sectional dependence.FindingsA strong link between trade and environmental stringency is observed for textile in the present study. For G20 countries, slight evidence of the Pollution Haven Hypothesis has also been witnessed in the study. Correspondingly, the results reveal the presence of long-run association between the variables under study, implying that stringent environmental policies reduce RCA for some countries, whereas some countries witness the Porter hypothesis.Research limitations/implicationsThe results imply that policy formulation should not aim at limiting the efforts of connecting RCA to environmental stringency but to set trade policies in a wider framework, considering environmental concerns, as these are inseparable subjects. However, this study also provides relevant real-world implications that can support further research.Practical implicationsThe present study has important implications for textile exporters such as green innovations. The Porter hypothesis can be a beneficial tool for G20 exporters in enhancing their export performance, especially for the ones dealing in environmentally sensitive goods. This study offers relevant policy implications and provides directions for future research on global trade and environment nexus.Originality/valueThis study deals in a debatable area of research that evaluates the interlinkages between environmental stringency and global trade flows in the G20 countries. An important observation of the study is the asymmetrical nature of policy stringency across different countries and its impact on trade. The unavailability of updated data is the limitation of the present study.

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Section: Literature Reviewmentioning

confidence: 99%

Environmental policy stringency and comparative advantage of environmental sensitive goods: a study of textile exports in G20 countries

Mahajan

Majumdar

2021

BIJ

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“…The policy of environmental regulation forced the transformation or closure of high-pollution and high-emission enterprises. Inevitably, this will have a short-term shock on the economy, especially in the west, whose economic structure is dominated by the energy industry [50]. In any case, the low level of industrial structure, lack of innovation motivation, low level of education, and high emission of pollutants have led to the decline of high-quality economic development from 2016 to 2018.…”

Section: Methodsmentioning

confidence: 99%

Study on the Impact of Clean Power Investment on Regional High-Quality Economic Development in China

Zhuang

Pan

2022

Energies

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In 2017, the 19th CPC National Congress proposed to “establish a sound economic system of green, low-carbon and circular development”, which indicates the direction of high-quality economic development in the new era of China. Clean power investment is a powerful way to promote high-quality economic development by adopting non-fossil-energy utilization and low-emission technologies, as well as creating new jobs. Meanwhile, large-scale investment and a long investment return period result in negative effects on local economies. To better understand the effect of clean power investment, this paper selects panel data of thirty provinces in China from 2010 to 2019 to establish a spatial Durbin model to explore the impact of clean power investment on regional high-quality economic development. The results show that inter-regional high-quality economic development shows significant spatial auto-correlation characteristics. Clean power investment has not only a positive direct effect on high-quality economic development but also generates positive spatial spillover effects. Human capital, degree of government intervention, and urbanization rate have positive effects on regional high-quality economic development, while they play a suppressed role on neighboring regions.

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“…Implementations of environmental policies may increase cost of production and thereby reduces specialization of those countries with higher stringency (Mukherjee and Sohrabji, 2022). Sometime stringent environmental policies show insignificant effects on trade patterns (Tu et al ., 2019).…”

Section: Introductionmentioning

confidence: 99%

Environmental stringency and competitive export strengths: a study in context of environmentally sensitive goods in G20

Mahajan¹,

Majumdar²

2023

IJSE

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PurposeTrade of environmentally sensitive goods (ESGs) is often exposed to countries with less stringent regulations suggesting that those countries have comparative advantage in the polluting sector. The Group of Twenty (G20) members are among the highest polluters, globally. Different stringency policies are enacted time to time in G20 to control environment pollution. However, the impact of policy stringency on export performance of ESGs is seldom examined. The paper aims to address some of the issues concerning this matter.Design/methodology/approachThe present study aims to address the short run and long-run association between Revealed Comparative Advantage of ESGs and Environmental Policy Stringency Index for the period of 1990–2019 in G20. Periodic fluctuations and time adjustment mechanism are also studied. Second Generation Panel Cointegration, Vector Error Correction, Impulse Response Function and Variance Decomposition methods are employed to address the objectives.FindingsResult is evident that more exposure to stringent environmental regulations reduces the comparative advantage of ESGs in the long run. But there is no evidence of the short-run relationship between the variables. The possible reason could be that new regulations enacted prove fruitful in the long run.Originality/valueThe novelty of the study is to focus on inter linkages between stringency and global export competitiveness in G20, almost nonexistent in the past studies. The study also provides a road map to policymakers to find out potential ways for sustainable development by balancing environmental stringency measures and international trade.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2022-0560

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The Effects of Environmental Regulation on Exporters’ Exiting Behavior: The Evidence From China

Cited by 6 publications

References 22 publications

Environmental policy stringency and comparative advantage of environmental sensitive goods: a study of textile exports in G20 countries

Environmental policy stringency and comparative advantage of environmental sensitive goods: a study of textile exports in G20 countries

Study on the Impact of Clean Power Investment on Regional High-Quality Economic Development in China

Environmental stringency and competitive export strengths: a study in context of environmentally sensitive goods in G20

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