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Does export product quality matter for CO2 emissions? Evidence from China

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Abstract

This paper re-estimates the environmental Kuznets curve (EKC) in China. To this end, it uses the unit root tests with structural breaks and the autoregressive-distributed lag (ARDL) estimations over the period 1971–2010. The special role is given to the impact of export product quality on CO2 emissions in the empirical models. The paper finds that the EKC hypothesis is applicable in China. It also observes the positive effect from energy consumption to CO2 emissions. In addition, it finds that the export product quality is negatively associated with CO2 emissions. The paper also argues potential implications.

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Notes

  1. Papers on the determinants of export quality observed that FDI is an important determinant of the export quality (e.g., Harding and Javorcik 2012; Henn et al. 2015). The studies for testing the validity of the EKC hypothesis also underline that FDI is an important determinant of CO2 emissions (e.g., List and Co 2000; Tang and Tan 2015; Zhang and Zhou 2016). Therefore, export quality can be used as a control variable in the EKC hypothesis not only for trade openness, but also for FDI as the benchmark indicator of globalization.

  2. These new variables for globalization aspects can be listed as the economic complexity, export diversification, and export quality upgrading (see, e.g., Agosin et al. 2012; Gozgor and Can 2016b; Hausmann et al. 2007 and 2011; Henn et al. 2013 and 2015).

  3. It is observed that new variables for globalization are used in the studies investigating the relationship between international trade and CO2 emissions. For example, Gozgor and Can (2016a) analyzed the impacts of export diversification on CO2 emissions in Turkey, while Can and Gozgor (2016) investigated the effects of economic complexity on CO2 emissions in France within the context of the EKC hypothesis.

  4. Export product quality is mainly measured by the unit price in the literature (e.g., Feenstra and Romalis 2014; Hallak 2006; Hallak and Schott 2011; Hummels and Klenow 2005; Khandelwal 2010; Martin and Mejean 2014; Schott 2004). However, according to Henn et al. (2013 and 2015), the unit price does not completely reflect the export product quality and they propose the new index for measuring export product quality.

  5. Financial development, foreign direct investment (FDI), international trade, population, and urbanization are considered as controls for testing the validity of the EKC hypothesis. (e.g., Al-Mulali and Ozturk 2015; Bento and Moutinho 2016; Dogan and Turkekul 2016; Jebli et al. 2016; Lau et al. 2014; Liddle 2015; Tang and Tan 2015).

  6. There are also studies that focus on the relationship between the sub-elements of CO2 emissions and per capita income in China (e.g., Aslan and Gozbasi 2016).

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Acknowledgments

We would like to express our gratitude to three anonymous reviewers for their very valuable comments and suggestions, which substantially improved the paper.

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Authors and Affiliations

  1. Istanbul Medeniyet University, Istanbul, Turkey

    Giray Gozgor

  2. Hakkari University, Hakkari, Turkey

    Muhlis Can

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  1. Giray Gozgor
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  2. Muhlis Can
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Correspondence to Giray Gozgor.

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Responsible editor: Philippe Garrigues

Appendix

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Table 7 Statistical details of variables in the empirical model (1971–2010)
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Gozgor, G., Can, M. Does export product quality matter for CO2 emissions? Evidence from China. Environ Sci Pollut Res 24, 2866–2875 (2017). https://doi.org/10.1007/s11356-016-8070-6

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