Environmental regulation, ownership type and green trade

Hongxin Yao, Lei Wang and Zhiq

Abstract

The paper considers the diversification of ownership types in Chinese export sectors, and examines the impacts of pollution regulations on state-owned sector, private sector and foreign owned sector with panel data of 37 industries, thus verifies the promotion of environmental regulations on green trade in the light of factor intensity in different ownership sectors. With regard to the endogeneity of the environmental regulation variable, the paper adopts system GMM to estimate the model for robust results. It turns out that due to the comparative advantage of labor resource in Chinese export, the pollution regulations have significant negative effects on the export in all ownership sectors. However, since both the state-owned sector and the foreign owned sector have the high technology-intensity and capital-intensity, so the pollution emission is low and the regulatory effect is trivial accordingly. On the contrary, for the highly labor-intensive and low technology-intensive patterns exist in the private export sector, so the constraint of regulations is stringent, which will be conducive to the development of green trade.