An Empirical Study On China 's Environmental Regulation On The Competitive Form Of Export Trade

Using the spatial panel data of30Chinese provinces from2003-2011, the studyexamines the effect of environmental regulation on exports and verify the existence of“Race to the Bottom”. Since differences lie in many aspects such as ecnomomicdevelopment, technology accumulation, infrastructure and factor endowments, thesample is divided into eastern, central, western three sub samples respectively in orderto measure the impact of environmental regulation on trade in different areas.Maximum Likelihood Estimation (MLE) is adopted and three different spatial weightmatrixes are applied to gain the robust results. It turns out that relaxing environmentalregulation play a positive rule on exports and therefore local administrations do havethe reason or some incentives to distort environmental regulation in order to maintainits trade advantage. According to the estimates of three sub samples, the competitionof environmental regulation exist in these three areas, central district performs themost significant effect of “Race to the bottom” especial. Nowadays, the stimulation ofenvironmental regulation still not enables companies to develop “clean” approachesof production, which is a sign that relaxing environmental regulation would still beabused in the export expansion game.