Will the liberalization of intermediate trade restrain corporate pollution emissions?—Empirical evidence from Chinese micro-enterprises

Abstract

ABSTRACT Based on the integrated data of the industrial pollution database, the customs database and the Chinese industrial enterprise database from 2000 to 2012, the system GMM Model is used to estimate the relationship between the liberalization of intermediate goods trade and corporate pollution emissions. Also, it is used to explore whether environmental regulations can achieve the reduction of intermediate goods trade effect. The results show that by dividing intermediate trade liberalization into importation and exportation, it aggravates the pollution emission of enterprises, while environmental regulations alleviate it. Heterogeneity analysis shows that the importation of intermediate products aggravates enterprise pollution in processing trade mode and reduces pollution in general trade mode. While exportation of intermediate products aggravates pollution in both of these two trade modes and only processing one is statistically significant. Geographically, both importing and exporting of intermediate goods aggravate enterprise emissions in the East and Midwest. More specifically, importation plays a bigger role in the Midwestern areas as exportation does in the eastern place. Furthermore, we discover that different industries differ greatly by dividing them into 11 categories. Therefore, it is necessary to optimize the trade structure of intermediate goods while considering the different development stages of different regions at the same time.