Blame the Foreigners? Exports and Sulfur Dioxide Emissions in China

TY - JOUR

T1 - Blame the Foreigners? Exports and Sulfur Dioxide Emissions in China

AU - Wang, Zheng

N1 - Copyright: © 2021, The Author(s), under exclusive licence to Springer Nature B.V.

PY - 2021/10

Y1 - 2021/10

N2 - This paper provides an overhaul of the contribution of exports to industrial sulfur dioxide (SO 2) emissions in Chinese cities. My estimation strategy exploits the import demand shocks of export destination markets (net of their demand for Chinese products) as a plausibly exogenous source of variation in the cities’ exports. The baseline results show that a 10%-point increase in export shock (weighted by the exporting industry’s relative emission intensity) leads to a 1.6%-point rise in SO 2 emissions, equivalent to a 635-ton increase per year for an average Chinese city. This estimate remains qualitatively stable to an array of robustness checks by accounting for: alternative controls for production for domestic sales shocks, the city market share in global trade, and the influence of a lagged impact of foreign demand shocks. Tentative evidence also suggests that production for exports does not contribute to nationwide emission intensity drop. A further anatomy shows with weak evidence that foreign-owned firms and deeper contractual links with the global production network could play a positive role in reducing the environmental footprint of industrial activities.

AB - This paper provides an overhaul of the contribution of exports to industrial sulfur dioxide (SO 2) emissions in Chinese cities. My estimation strategy exploits the import demand shocks of export destination markets (net of their demand for Chinese products) as a plausibly exogenous source of variation in the cities’ exports. The baseline results show that a 10%-point increase in export shock (weighted by the exporting industry’s relative emission intensity) leads to a 1.6%-point rise in SO 2 emissions, equivalent to a 635-ton increase per year for an average Chinese city. This estimate remains qualitatively stable to an array of robustness checks by accounting for: alternative controls for production for domestic sales shocks, the city market share in global trade, and the influence of a lagged impact of foreign demand shocks. Tentative evidence also suggests that production for exports does not contribute to nationwide emission intensity drop. A further anatomy shows with weak evidence that foreign-owned firms and deeper contractual links with the global production network could play a positive role in reducing the environmental footprint of industrial activities.

KW - China

KW - Environmental regulation

KW - Pollution

KW - Trade

UR - https://www.scopus.com/pages/publications/85111645808

U2 - 10.1007/s10640-021-00586-6

DO - 10.1007/s10640-021-00586-6

M3 - Article

AN - SCOPUS:85111645808

SN - 0924-6460

VL - 80

SP - 279

EP - 309

JO - Environmental and Resource Economics

JF - Environmental and Resource Economics

IS - 2

ER -