The impact of environmental decentralization on the export domestic value-added rate of enterprises in China

Abstract

This paper examines the impact of environmental decentralization on the export domestic value-added rate of enterprises using combined data from 2000–2014 from China Industrial Enterprise Database, China Customs Database, WIOD, China Environment Yearbook and China Enterprise Patent Database. The research findings show that the overall environmental decentralization has an inverted U-shaped impact on enterprises’ export DVAR, with 94.4% of the sample in the promotion interval. 73.2% of ordinary trade enterprises and 85.7% of processing trade enterprises are in the suppressive interval of the U-shaped impact of administrative decentralization; 69.2% of ordinary trade enterprises are in the suppressive interval of the U-shaped impact of monitoring decentralization, and 85.7% of processing trade enterprises are in the promotion range of the inverted U-shaped impact; 66.0% of ordinary trade enterprises and 86.7% of processing trade enterprises are in the suppression range of the U-shaped impact of monitoring decentralization. In addition, cost markup and R&D innovation as mediating variables are important transmission channels for environmental decentralization to influence enterprises’ export DVAR.