Abstract
Oscillations in the global trade milieu have exacerbated the ambiguity experienced by Chinese enterprises, thereby influencing their ecological transition. The ongoing debate over whether trade uncertainty augments corporate emissions, exacerbating pollution, or attenuates emissions, encouraging sustainable production, has yet to reach a consensus. The current investigation employs a textual analysis methodology to explore the influence of trade policy uncertainty on pollution emissions, by sourcing indicators of trade policy uncertainty that echo firm-level uncertainty within the period 2008 to 2021. Utilizing the fixed effects model for our analysis, the findings substantiate that escalated uncertainty at the micro-level catalyzes an increase in pollution emissions originating from firms. Crucially, we find that risk diversification and innovation bolster firms’ capacities to manage pollution under escalating uncertainty. Furthermore, our estimation reveals that enterprises with low market competitiveness, high financial constraints, and moderate overseas market share are most significantly impacted, whereas those with robust patent portfolios remain largely unaffected. This study carries considerable implications for firms striving to achieve an ecological transition and offers insights for fostering sustainable and high-quality global economic development.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Data availability
All data analyzed during this study are available and collected from mentioned database.
References
Adams S, Adedoyin F, Olaniran E, Bekun FV (2020) Energy consumption, economic policy uncertainty and carbon emissions; causality evidence from resource rich economies. Econ Anal Policy 68:179–190. https://doi.org/10.1016/j.eap.2020.09.012
Adedoyin FF, Zakari A (2020) Energy consumption, economic expansion, and CO2 emission in the UK: the role of economic policy uncertainty. Sci Total Environ 738:140014. https://doi.org/10.1016/j.scitotenv.2020.140014
Ahmad W, Ullah S, Ozturk I, Majeed MT (2021) Does inflation instability affect environmental pollution? Fresh evidence from Asian economies. Energy Environ 32:1275–1291. https://doi.org/10.1177/0958305X20971804
Alsagr N (2023) Financial efficiency and its impact on renewable energy investment: empirical evidence from advanced and emerging economies. J Clean Prod 401:136738. https://doi.org/10.1016/j.jclepro.2023.136738
Anser MK, Apergis N, Syed QR (2021) Impact of economic policy uncertainty on CO2 emissions: evidence from top ten carbon emitter countries. Environ Sci Pollut Res 28:29369–29378. https://doi.org/10.1007/s11356-021-12782-4
Baker SR, Bloom N, Davis SJ (2016) Measuring economic policy uncertainty*. Q J Econ 131:1593–1636. https://doi.org/10.1093/qje/qjw024
Benguria F, Choi J, Swenson DL, Xu M (Jimmy) (2022) Anxiety or pain? The impact of tariffs and uncertainty on Chinese firms in the trade war. J Int Econ 137:103608. https://doi.org/10.1016/j.jinteco.2022.103608
Berman E, Bui LTM (2001) Environmental regulation and productivity: evidence from oil refineries. Rev Econ Stat 83:498–510. https://doi.org/10.1162/00346530152480144
Bloom N, Van Reenen J (2010) Why do management practices differ across firms and countries? J Econ Perspect 24:203–224. https://doi.org/10.1257/jep.24.1.203
Brown JR, Fazzari SM, Petersen BC (2009) Financing innovation and growth: cash flow, external equity, and the 1990s R&D boom. J Finance 64:151–185. https://doi.org/10.1111/j.1540-6261.2008.01431.x
Caggese A (2012) Entrepreneurial risk, investment, and innovation. J Financ Econ 106:287–307. https://doi.org/10.1016/j.jfineco.2012.05.009
Caldara D, Iacoviello M, Molligo P et al (2020) The economic effects of trade policy uncertainty. J Monet Econ 109:38–59. https://doi.org/10.1016/j.jmoneco.2019.11.002
Cherniwchan J, Copeland BR, Taylor MS (2017) Trade and the environment: new methods, measurements, and results. Annu Rev Econ 9:59–85. https://doi.org/10.1146/annurev-economics-063016-103756
Chichilnisky G (1994) North-South trade and the global environment. Am Econ Rev 84:851–874
Conconi P, Sapir A, Zanardi M (2016) The internationalization process of firms: from exports to FDI. J Int Econ 99:16–30. https://doi.org/10.1016/j.jinteco.2015.12.004
Copeland B, Taylor MS (2001) International trade and the environment: a framework for analysis. National Bureau of Economic Research, Cambridge, MA
Crowley M, Meng N, Song H (2018) Tariff scares: trade policy uncertainty and foreign market entry by Chinese firms. J Int Econ 114:96–115. https://doi.org/10.1016/j.jinteco.2018.05.003
Day M-Y, Lee C-C (2016) Deep learning for financial sentiment analysis on finance news providers. In: 2016 IEEE/ACM International Conference on Advances in Social Networks Analysis and Mining (ASONAM). pp 1127–1134
Duan Y, Jiang X (2017) Temporal change of China’s pollution terms of trade and its determinants. Ecol Econ 132:31–44. https://doi.org/10.1016/j.ecolecon.2016.10.001
Earnhart D, Lízal L (2007) Direct and indirect effects of ownership on firm-level environmental performance. East Eur Econ 45:66–87. https://doi.org/10.2753/EEE0012-8775450403
Fan H, Zivin JSG, Kou Z et al (2019) Going green in China: firms’ responses to stricter environmental regulations. National Bureau of Economic Research, Cambridge, MA
Fang H, Li Z, Xu N, Yan H (2023) Firms and local governments: relationship building during political turnovers. Rev Finance 27:739–762. https://doi.org/10.1093/rof/rfac038
Feng L, Li Z, Swenson DL (2017) Trade policy uncertainty and exports: evidence from China’s WTO accession. J Int Econ 106:20–36. https://doi.org/10.1016/j.jinteco.2016.12.009
Forslid R, Okubo T, Ulltveit-Moe KH (2018) Why are firms that export cleaner? International trade, abatement and environmental emissions. J Environ Econ Manag 91:166–183. https://doi.org/10.1016/j.jeem.2018.07.006
Fredriksson PG (1997) The political economy of pollution taxes in a small open economy. J Environ Econ Manag 33:44–58. https://doi.org/10.1006/jeem.1996.0979
Ghisetti C, Quatraro F (2017) Green technologies and environmental productivity: a cross-sectoral analysis of direct and indirect effects in Italian regions. Ecol Econ 132:1–13. https://doi.org/10.1016/j.ecolecon.2016.10.003
Giannetti M, Burkart M, Ellingsen T (2011) What you sell is what you lend? Explaining trade credit contracts. Rev Financ Stud 24:1261–1298. https://doi.org/10.1093/rfs/hhn096
Gong C, Zhang J, Liu H (2021) Do industrial pollution activities in China respond to ecological fiscal transfers? Evidence from payments to national key ecological function zones. J Environ Plan Manag 64:1184–1203. https://doi.org/10.1080/09640568.2020.1813695
Gray WB, Shadbegian RJ (2003) Plant vintage, technology, and environmental regulation. J Environ Econ Manag 46:384–402. https://doi.org/10.1016/S0095-0696(03)00031-7
Gu X, Alamri AM, Ahmad M et al (2023) Natural resources extraction and green finance: Dutch disease and COP27 targets for OECD countries. Resour Policy 81:103404. https://doi.org/10.1016/j.resourpol.2023.103404
Hadlock CJ, Pierce JR (2010) New evidence on measuring financial constraints: moving beyond the KZ Index. Rev Financ Stud 23:1909–1940. https://doi.org/10.1093/rfs/hhq009
Han W, Wu D (2023) Internationalization and earnings management: evidence from China. Finance Res Lett 53:103589. https://doi.org/10.1016/j.frl.2022.103589
Handley K (2014) Exporting under trade policy uncertainty: theory and evidence. J Int Econ 94:50–66. https://doi.org/10.1016/j.jinteco.2014.05.005
Handley K, Limão N (2015) Trade and investment under policy uncertainty: theory and firm evidence. Am Econ J Econ Policy 7:189–222. https://doi.org/10.1257/pol.20140068
Handley K, Limão N (2017) Policy uncertainty, trade, and welfare: theory and evidence for China and the United States. Am Econ Rev 107:2731–2783. https://doi.org/10.1257/aer.20141419
Hao Y, Guo Y, Guo Y et al (2020) Does outward foreign direct investment (OFDI) affect the home country’s environmental quality? The case of China. Struct Change Econ Dyn 52:109–119. https://doi.org/10.1016/j.strueco.2019.08.012
Hassan T, Khan Y, He C et al (2022) Environmental regulations, political risk and consumption-based carbon emissions: evidence from OECD economies. J Environ Manag 320:115893. https://doi.org/10.1016/j.jenvman.2022.115893
Hepburn C, Adlen E, Beddington J et al (2019) The technological and economic prospects for CO2 utilization and removal. Nature 575:87–97. https://doi.org/10.1038/s41586-019-1681-6
Huang Y, Luk P (2020) Measuring economic policy uncertainty in China. China Econ Rev 59:101367. https://doi.org/10.1016/j.chieco.2019.101367
Hübler M, Keller A (2010) Energy savings via FDI? Empirical evidence from developing countries. Environ Dev Econ 15:59–80. https://doi.org/10.1017/S1355770X09990088
Jiang Y, Zhou Z, Liu C (2019) Does economic policy uncertainty matter for carbon emission? Evidence from US sector level data. Environ Sci Pollut Res 26:24380–24394. https://doi.org/10.1007/s11356-019-05627-8
Kellenberg DK (2008) A reexamination of the role of income for the trade and environment debate. Ecol Econ 68:106–115. https://doi.org/10.1016/j.ecolecon.2008.02.007
Kim EH, Singal V (1993) Mergers and market power: evidence from the airline industry. Am Econ Rev 83:549–569
Li H, Zheng Q, Zhang B, Sun C (2021) Trade policy uncertainty and improvement in energy efficiency: empirical evidence from prefecture-level cities in China. Energy Econ 104:105691. https://doi.org/10.1016/j.eneco.2021.105691
Lin Y, Fan D, Shi X, Fu M (2021) The effects of supply chain diversification during the COVID-19 crisis: evidence from Chinese manufacturers. Transp Res Part E Logist Transp Rev 155:102493. https://doi.org/10.1016/j.tre.2021.102493
Liu Q, Ma H (2020) Trade policy uncertainty and innovation: firm level evidence from China’s WTO accession. J Int Econ 127:103387. https://doi.org/10.1016/j.jinteco.2020.103387
Mathews JA, Reinert ES (2014) Renewables, manufacturing and green growth: energy strategies based on capturing increasing returns. Futures 61:13–22. https://doi.org/10.1016/j.futures.2014.04.011
Miller D, Friesen PH (1978) Archetypes of strategy formulation. Manag Sci 24:921–933
Pang A, Shaw D (2011) Optimal emission tax with pre-existing distortions. Environ Econ Policy Stud 13:79–88. https://doi.org/10.1007/s10018-010-0005-8
Rhoades SA (1985) Market share as a source of market power: implications and some evidence. J Econ Bus 37:343–363. https://doi.org/10.1016/0148-6195(85)90027-X
Ryzhenkov M (2016) Resource misallocation and manufacturing productivity: the case of Ukraine. J Comp Econ 44:41–55. https://doi.org/10.1016/j.jce.2015.12.003
Shapiro JS, Walker R (2018) Why is pollution from US manufacturing declining? The roles of environmental regulation, productivity, and trade. Am Econ Rev 108:3814–3854. https://doi.org/10.1257/aer.20151272
Sohail MT, Majeed MT, Shaikh PA, Andlib Z (2022a) Environmental costs of political instability in Pakistan: policy options for clean energy consumption and environment. Environ Sci Pollut Res Int 29:25184–25193. https://doi.org/10.1007/s11356-021-17646-5
Sohail MT, Ullah S, Majeed MT (2022b) Effect of policy uncertainty on green growth in high-polluting economies. J Clean Prod 380:135043. https://doi.org/10.1016/j.jclepro.2022.135043
Tariq A, Badir YF, Tariq W, Bhutta US (2017) Drivers and consequences of green product and process innovation: a systematic review, conceptual framework, and future outlook. Technol Soc 51:8–23. https://doi.org/10.1016/j.techsoc.2017.06.002
Van Biesebroeck J (2005) Exporting raises productivity in sub-Saharan African manufacturing firms. J Int Econ 67:373–391. https://doi.org/10.1016/j.jinteco.2004.12.002
Wang K, Wu M, Sun Y et al (2019) Resource abundance, industrial structure, and regional carbon emissions efficiency in China. Resour Policy 60:203–214. https://doi.org/10.1016/j.resourpol.2019.01.001
Whitney DE, Luo J, Heller DA (2014) The benefits and constraints of temporary sourcing diversification in supply chain disruption and recovery. J Purch Supply Manag 20:238–250. https://doi.org/10.1016/j.pursup.2014.06.001
Xu Y, Fan X, Zhang Z, Zhang R (2020) Trade liberalization and haze pollution: evidence from China. Ecol Indic 109:105825. https://doi.org/10.1016/j.ecolind.2019.105825
Yang C-H, Tsou M-W (2022) Firm and export heterogeneity in export growth: evidence from China. Acad Econ Pap 50:435–469
Yen K-C, Cheng H-P (2021) Economic policy uncertainty and cryptocurrency volatility. Finance Res Lett 38:101428. https://doi.org/10.1016/j.frl.2020.101428
Yu J, Shi X, Guo D, Yang L (2021) Economic policy uncertainty (EPU) and firm carbon emissions: evidence using a China provincial EPU index. Energy Econ 94:105071. https://doi.org/10.1016/j.eneco.2020.105071
Zakari A, Adedoyin FF, Bekun FV (2021) The effect of energy consumption on the environment in the OECD countries: economic policy uncertainty perspectives. Environ Sci Pollut Res 28:52295–52305. https://doi.org/10.1007/s11356-021-14463-8
Zhang D, Rong Z, Ji Q (2019) Green innovation and firm performance: evidence from listed companies in China. Resour Conserv Recycl 144:48–55. https://doi.org/10.1016/j.resconrec.2019.01.023
Zhou F, Wen H (2022) Trade policy uncertainty, development strategy, and export behavior: Evidence from listed industrial companies in China. J Asian Econ 82:101528. https://doi.org/10.1016/j.asieco.2022.101528
Funding
This research was funded by the URC scientific research project (URC202207); Philosophy and Social Sciences Youth Talent Cultivation and Innovation Foundation of Nanchang University funded this project under grant name “Study on collaborative governance of environmental pollution and health risks in global production networks: Theory and practice based on value chain”.
Author information
Authors and Affiliations
Contributions
All authors contributed to the study conception and design. The first author (Hongwen Chen) was responsible for writing—review and editing. The second author (Bohan Yan) was responsible for writing—original draft preparation, while the third author (Rilong Fei) was responsible for proofreading and manuscript editing. The fourth author (Shipeng Bao) was responsible for original draft preparation.
Corresponding author
Ethics declarations
Ethics approval
Not applicable.
Consent to participate
Not applicable.
Consent for publication
Not applicable.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Ilhan Ozturk
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Chen, H., Yan, B., Fei, R. et al. Assessing the impact of trade policy uncertainty on pollution emissions: an analysis of Chinese firms’ green transformation. Environ Sci Pollut Res 30, 104577–104591 (2023). https://doi.org/10.1007/s11356-023-29778-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-023-29778-x