The Effect Of Import Of Intermediate Goods And Tariff Reduction On Firm's Pollution Emission

Over the past four decades of reform and opening-up,China's GDP rose from 367.87 billion in 1978 to 90.03 trillion in 2018,and its total import trade increased from 18.74 billion in 1978 to 14.09 trillion in 2018.However,with the rapid growth of import and export trade and the whole economy,China's resource consumption and environmental pollution are under great pressure.In 2011,the state council announced the third batch of cities with exhausted resources.So far,there are 69 cities with exhausted resources in China.Resource depletion also brings more and more serious environmental problems.At present,there are many disputes about the impact of trade liberalization on environmental quality.In addition,most studies on the impact of trade on the environment focus on the macro level of countries,provinces and cities,but few involve micro firms,and this part of the researches mainly focus on foreign countries.With the continuous ferment of Sino-US trade friction in recent years,the topic of intermediate goods and tariff reduction is popular again.As the basic unit of society,firms are not only the main body of import and export trade,but also the "prime culprit"of environmental pollution.In this context,this paper attempts to explain the relationship between firms' import of intermediate goods and their pollution emissions from the perspective of trade liberalization.Based on the theoretical model of Halpern et al.(2015),this paper integrates the intermediate goods'customs rate and environmental pollution into the production model of enterprises,and draws the following three conclusions:(1)the import behavior of intermediate goods is conducive to the energy saving and emission reduction of firms;(2)import intermediate goods tariffs take firms' total factor productivity(TFP)as an intermediate "bridge",and thus have an effect on firms'pollution emissions by influencing their TFP;(3)tariff reduction on imported intermediate goods is conducive to reducing firms' pollution emissions.On the basis of clarifying the internal mechanism,this paper takes the data of Chinese manufacturing enterprises in 2004 as the research sample to empirically test the impact of import of intermediate goods and tariff reduction on the pollution emission of Chinese manufacturing firms.Firstly,multiple regression and propensity score matching(PSM)were used to verify whether inference(1)was valid in Chinese firms.After overcoming the endogeneity problem,the empirical results are consistent with the corollary.Also,PSM method was used for grouping test.On the one hand,it aims to explore the heterogeneity of ownership,industry and region of the impact of imports of intermediate goods on environmental quality,and on the other hand,to verify the robustness of empirical results.After the above conclusion is reached,the "bridge"role of firms' total factor productivity in this process is further tested through the adjustment effect,which confirms inference(2)that the import behavior of intermediate goods affects firms' total factor productivity and thus affects their pollution emissions.Finally,the multiple regression is carried out by adopting the import intermediate tariff rate at the industry level,and the conclusion is drawn that the tariff rate is positively correlated with the pollution emission of firms.For the reliability of this conclusion,this paper continues to use quantile regression and replace the core variable with the firm level of import intermediate goods'tariff rate and import intermediate goods' tariff rate of industry with a lag of one period for robust testing,the results are not significantly different,which confirms the stability of conclusions.This paper shows that some existing researches only focus on the impact of firms'export on the environment,ignoring the important role of intermediate goods import.Therefore,this paper puts forward suggestions from the perspective of firm governance,industry development and government regulation,hoping that firms can timely change their inherent ideas in international trade,strive to improve their competitive advantages through import of intermediate goods,and make more contributions to reducing environmental pollution.