Environmental Information Disclosure And Export Product Quality Adjustment: A Model And Empirical Study

Chinese-style modernization is characterized by harmonious coexistence between man and nature,which requires a high level of environmental protection and high-quality economic development.As a major manufacturing country in the world,manufacturing industry is the main body and pillar of China’s economy.Facing the increasingly complex international economic situation,Chinese manufacturing industry needs to improve product quality,form a new advantage of export competition and promote high-quality economic development.Under the deepening background of ecological civilization construction in our country,clarifying the influence of government environmental regulation on the behavior and competitiveness of manufacturing export firms has become an important research issue to promote the development of high-quality foreign trade.With the premise of environmental governance to co-governance by the whole nation,environmental information disclosure(EID)is one of important contents in the modern environmental governance system and a new means of environmental regulation.This paper examines the impact of EID on the quality adjustment of export products by model and empirical study,and analyzes its influence mechanism and the resulting export effect.First of all,this paper analyzes the changes of China’s EID and export product quality,and investigate the correlation between the both of them.Based on the Pollution Source Supervision Information Disclosure Index(PITI)of 113 cities in China from 2008 to 2018,it can be seen that the overall degree of EID in China is not high,but with an increasing trend year by year.The degree of EID in different cities and different years has great differences and volatility.The quality of Chinese export products fluctuated greatly from 2000 to 2016,and the fluctuations in different periods have significant characteristics.the PITI assessment concerning 113 participating cities include all provincial capitals and major industrial cities,where the majority of the country’s export business is covered.The scatter plot shows that there is a positive correlation between urban PITI and export product quality,and a nonlinear relationship does exist.The above analysis provides the factual basis and the empirical enlightenment for the following paper.Then,through theoretical modeling and empirical test,this paper examines the product quality adjustment mechanism under the influence of EID.EID is taken as an exogenous environmental cost,which is incorporated into the local equilibrium model of endogenous decision of product quality.It is found that firms will make differentiated quality adjustment according to the level of product quality under the impact of environmental cost,the quality of high-quality products is further improved,while the quality of low-quality products is reduced.And the promoting effect on high quality products gradually decreases with the increase of product quality,but the inhibiting effect on low quality products does not decrease with the decrease of product quality.Based on the firm-product level data,the empirical test,endogenous problem analysis and mechanism test are consistent with the conclusions of the model.Moreover,the study also found that differentiated product quality adjustment by firms under the influence of EID indirectly promoted the product conversion within firms and the entry and exit of firms within the industry,which is an important reason for the EID to promote the overall quality of Chinese export products.Then,this paper further demonstrates the core conclusions obtained above from the perspective of firm’s competitive strategy.Through the identification of firms’ competitive strategy,this paper finds that Chinese export firms are more inclined to adopt a quality-competitive strategy.Examining the impact of EID on export product quality of firms adopting different competitive strategies,the study finds that due to the high product quality of firms adopting quality-competitive strategies,they have significantly improved the quality of export products under the influence of EID,and the quality of firms adopting cost-competitive strategies is low,thus significantly reducing the product quality.The above conclusions are still valid after a series of robustness tests,which further demonstrates the core mechanism of this paper,that is,heterogeneous firms will make differentiated product quality adjustment according to their product quality level when facing environmental cost shock.The study also finds that firms adopting quality-competitive strategy not only improve the quality of export products,but also increase the price,export value and export volume.Firms adopting cost-competitive strategy simultaneously reduce the quality,marginal cost and product price of export product,and maintain the original market share through the “low quality,low price” strategy;the remaining companies that do not adopt a clear competitive strategy face a loss of market share.However,the rest of the firms that have not adopted a clear competitive strategy are facing the loss of market share.Finally,the core mechanism of this paper is demonstrated again from the perspective of multi-product firms.On the basis of theoretical analysis,this paper constructs a quasi-natural experiment based on the event that IPE began to disclose PITI of 113 cities since 2008,and uses the difference-in-differences method to examine the impact of EID on product quality adjustment and export distribution in multi-product firms.The study found that EID has caused an environmental cost shock to firms,prompting multi-product firms to concentrate resources from edge products to core products,and resist the adverse effects of environmental cost shocks through the quality upgrading of core products.Since China’s multi-product export firms mostly adopt quality-competitive strategy,the quality adjustment within the firm makes the quality advantage of the core products more prominent,and the export share increases compared with the marginal products.The above research conclusions are still valid after a series of heterogeneity and robustness tests.Further research shows that multi-product firms have significantly improved the export competitiveness of core products by focusing resources on the quality upgrading of their core products,which is conducive to improving the firms’ trade income.However,this production adjustment also reduces the degree of market competition in the industry,and the market power of firms tends to rise,which has a potential adverse impact on the efficiency of resource allocation.This paper reveals the mechanism of product quality adjustment of heterogeneous firms under the influence of EID,and comprehensively examines the impact of EID on firms’ export product quality and export performance.The research content enriches and expands the research scope of heterogeneous-firm trade theory,helps to deeply understand the behavioral decision-making mechanism of heterogeneous firms under the influence of environmental regulation,and provides a new research perspective and enlightenment for the controversial issue of how environmental regulation affects firm’s competitiveness.The conclusions of this paper are helpful to further optimize the design of China’s modern environmental governance mechanism,help government to make better use of environmental regulation to promote the green and high-quality transformation of China’s manufacturing firms,and provide policy enlightenment for cultivating new advantages of export competition,accelerating the construction of manufacturing power and promoting Chinese-style modernization.