The impact of environmental regulations on corporate productivity via import behaviour: the case of China's manufacturing corporations

With the widespread implementation of environmental regulations worldwide, their impact on corporate productivity has received increasing attention. Current studies primarily examined the impact of environmental regulations on corporate productivity from the mediating effect of innovation and failed to consider the mediating effect of import behaviour. We scrutinised the relationship between the stringency of environmental regulations and the quality of imported products, and its effects on corporate productivity, in the case of China's manufacturing corporations. Moreover, we analysed the heterogeneity of these effects from the perspective of ownership and location. The findings show that the increasing stringency of environmental regulations prompts corporations to improve the quality of imported products rather than to transfer polluting industries; thus, it does not pose a threat to the environment of neighbouring countries. Besides, the increasing stringency of environmental regulations also leads to learning effects and improvements in imported product quality, thereby increasing corporate productivity. Finally, the effects of the interaction between environmental regulations and import behaviour on corporate productivity are heterogeneous, as they depend on the type of ownership and corporate location. Therefore, the focus on import behaviour improves the current understanding and contributes a heuristic investigation to the current debate on the relationship between environmental regulations, import behaviour, and corporate productivity.

Automated summary

This study examines the impact of environmental regulations on the quality of imported products and corporate productivity in China's manufacturing corporations. It also explores the heterogeneity of these effects based on ownership and location. The findings suggest that stricter environmental regulations encourage companies to improve the quality of imported products, leading to increased corporate productivity.