Impact of Environmental Regulations on Export Trade-Empirical Analysis Based on Zhejiang Province.

Abstract

There is a close connection between export trade and environmental regulations. How to realize the green development of export trade under the constraint of environmental regulation policy is a controversial topic in both theoretical research and practice. Considering the leading role of Zhejiang export trade in China, based on the extended gravity model, this paper attempts to explore the impact of environmental regulations on export trade using the panel data of Zhejiang Province together with that of 18 major “Belt and Road” trading countries (regions) from 2004 to 2016. It provides a theoretical basis for promoting the coordinated development of environmental protection and export trade. This not only has theoretical and practical significance for various regions in China but also for other countries and regions in the world when formulating environmental regulation standards and implementation intensity. The empirical results show that there is a U-shaped relationship between environmental regulations and the development of export trade; namely, the former suppresses the latter before promotion happens. Specifically, environmental regulation could increase the cost of export products and curb the development of export trade in the short term. On the other hand, it encourages enterprises to carry out technological innovation and improve efficiency and competitiveness, thus contributing to the development of export trade in the long term.