Environmental regulation and export sophistication impact on Chinese firms: a global value chain perspective

This article is based on the two-control zone policy of the acid rain and sulfur dioxide pollution control zones. Using the merged data of China Customs Import and Export Trade Database and China Industrial Enterprise Database from 2000 to 2006, the double-difference method is used to test the impact of environmental controls on the complexity of export technology and the upgrading of Chinese enterprises' global value chain. The research results indicate that: first, environmental regulation significantly promotes the complexity of export technology for enterprises. However, due to differences in enterprise heterogeneity, there are significant differences in the impact of environmental regulation on the complexity of export technology. Among them, environmental regulation has a significant impact on the export technological complexity of enterprises in processing trade, labor-intensive and heavily polluting industries; second, from the test results of the impact channels, it can be seen that innovative research and development is an important channel for environmental regulation to affect the complexity of enterprises' export technology. It is precisely due to the cost effect of environmental regulation that enterprises obtain compensation effects through R&D and innovation, thereby promoting the improvement of enterprises' export technology complexity; third, as the complexity of enterprises' export technology increases, environmental regulation is more conducive to embedding enterprises into the global value chain, and this impact varies depending on trade methods, factor intensity, and industry pollution levels. The research results of this article provide empirical evidence for the formulation of environmental regulation policies and for enterprises to climb the high-end links of the global value chain.

Automated summary

This article examines the impact of environmental controls on the complexity of export technology and the upgrading of Chinese enterprises' global value chain. The research findings suggest that environmental regulation promotes the complexity of export technology, particularly in processing trade, labor-intensive, and heavily polluting industries. Innovative research and development serve as an important channel through which environmental regulation affects the complexity of export technology. Moreover, as the complexity of export technology increases, environmental regulation becomes more conducive to embedding enterprises into the global value chain.