The environmental effect of trade liberalization: Evidence from China's manufacturing firms
While prior literature on trade liberalisation and the environment has mostly focused on the macroeconomic ramifications, this study explores at the firm level whether and how changes of trade barriers brought about by China's accession to the WTO may impact on its manufacturing firms’ environmental performance. Adopting a difference-in-differences (DID) methodology, we document the effects of tariff reductions on improving firm-level SO2 emission intensity, and the key corporate strategic decisions responsible for delivering the observed results, with robustness tests covering other major pollutants. In response to trade liberalisation, firms are found to increase labour resources for environmental protection and to improve their production processes to reduce emission intensity. This study contributes to the literature by investigating at the level of the operating firm how output and input tariff reductions may impact on environmental performance and uncovering for the first time the specific actions responsible for the results.
Duke Scholars
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- Economics
- 3801 Applied economics
- 1605 Policy and Administration
- 1402 Applied Economics
Citation
Published In
DOI
EISSN
ISSN
Publication Date
Volume
Issue
Start / End Page
Related Subject Headings
- Economics
- 3801 Applied economics
- 1605 Policy and Administration
- 1402 Applied Economics