Exporting, Abatement, and Firm-Level Emissions: Evidence from China's Accession to the WTO

Abstract

Abstract This paper studies the joint impact of exporting and abatement on the environmental performance of Chinese manufacturers. For two common air pollutants (SO2 and industrial dust) we document that (a) exporters are significantly less emissions-intensive relative to their nonexporting counterparts and (b) this difference cannot be explained by differential rates of abatement alone. Employing variation in trade and environmental conditions across time and space, we quantify the impact of endogenous export and abatement decisions on firm-level emissions. We find that exporting reduces emissions by at least 36 percent across pollutants. We explore underlying determinants of export-driven reductions in emissions-intensity.