Does Environmental Regulation Promote the Upgrade of the Export Technology Structure: Evidence from China

Rapid economic growth is accompanied by the continuous degradation of the environmental quality, low efficiency of natural-resource utilization and increasing health losses. With the growing environmental problems, countries in the world have gradually attached importance to environmental protection and regulation. As an effective means of environmental protection by the government, environmental regulation's role in high-quality development cannot be understated. On the basis of a two-way fixed-effects model, the panel data of 276 prefecture-level cities of China during the period 2007-2016 were used to explore the effect of environmental regulation on China's export technology structure, and the influence mechanism between the two. Moreover, panel quantile regression was used to examine the heterogeneity of the effect of environmental regulation on the export technology structures of Chinese cities with distinct technological levels. The empirical results prove that environmental regulation can boost the upgrade of China's export technology structure by encouraging innovation. Furthermore, the impact of environmental regulation on China's export technology structure changes according to the export technical complexity. With the improvement in the export technology structure, the boost effect appears as an inverted U-shaped change.