How does pollution heterogeneity affect the role of cleaner production regulations? Evidence from Chinese enterprises' domestic value-added in exports

Cleaner production has been emphasized more in stimulating green transformations of enterprises at the source, while its diversified impacts related to the heterogeneity of pollution levels on exporting enterprises' behaviors are still under-discussed. This study describes an empirical model to show how pollution heterogeneity affects the role of cleaner production standards (CPSs) in promoting Chinese enterprises' domestic value-added rate (DVAR) of exports. We find that the relation between the CPSs and enterprises' DVAR is subject to pollution levels. The positive impact of CPSs on DVAR tends to be weaker for high-polluting enterprises. Mechanism analysis shows that CPSs increase the enterprises' DVAR by stimulating technological innovations and improving cost efficiency, which are also affected by pollution heterogeneity. The heavy pollution would undermine the positive effect of technological innovations and cost efficiency, and consequently a weaker promotion effect of CPSs on high-polluting enterprises' DVAR. This study enriches the knowledge of the heterogeneous effects of environmental regulations, which has great significance in formulating specific policies for green development.