Import Liberalization And Firm-level Pollution Emission

Since the reform and opening-up,China has achieved tremendous success in international trade and becomes one of the biggest traders.Meanwhile,the deterioration of the environment is increasingly serious and threatening,causing huge welfare losses and damaging China's sustainable development.In the context of economic globalization,the environmental effects of international trade have been discussed in several aspects,while little is known about the firm-level environmental performance of import liberalization from the perspective of developing countries.China being the biggest developing country,it is of considerable theoretical and practical significance to discuss the environmental consequences of China.To comprehensively understand the relationship between freer imports and firmlevel pollution emissions,this paper examines how freer import of intermediates and final goods influences the environmental performance of manufacturers,and further analyzes the potential mechanism via firm scale,composition and technique effects.Relying on the dataset containing China's manufacturers from 1998 to 2007,this paper finds that the establishment-level environmental effects of import liberalization vary in product types and pollutants,but they are consistent in terms of mechanism test.For both intermediates and final goods,tariffs reduction of imports can increase pollution emissions via enlarging production,but improve environmental results by promoting capital accumulation and technological advances.In conclusion,although the environmental effects of import liberalization vary,given the benefit of freer import to manufacturers' growth,China should keep upholding trade liberalization.Additionally,for sustainable development,the authorities should encourage manufacturers to accumulate capital and improve productivity to cope with the adverse environmental effects of import liberalization.