Environmental policy and exports: Evidence from Chinese cities

Laura Hering, S Poncet

Research output: Contribution to journalArticleAcademicpeer-review

428 Citations (Scopus)


We study environmental regulation and its role for trade in China. Specifically, we assess the effectiveness of an environmental policy in China that introduced stricter regulations on sulfur dioxide (SO2) emissions in targeted cities. To identify the causal effect of this policy on exports, we use sectoral export data for a panel of Chinese cities and exploit variations in exports between cities and sectors, over time, and, in a second step, between firm types. We find a relative fall in sectoral exports in targeted cities after the implementation of the policy, which is sharper the more polluting the industry. Further, we find that the observed effect is mainly driven by privately owned firms, whereas exports of state-owned firms seem to be unaffected by the new policy. This finding is consistent with the preferential political treatment of state-owned firms in China.
Original languageEnglish
Pages (from-to)296-318
Number of pages23
JournalJournal of Environmental Economics & Management
Issue number2
Publication statusPublished - 2014


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