Impact of energy-saving and carbon reduction policy on the upgrading of export product quality - Empirical analysis based on the PSM-DID method

Abstract

In view of the dual background of high-quality economic transformation and low-carbon economy, this paper treats energy-saving and carbon reduction policy for key energy users as a quasi-natural experiment, and empirically investigates the causality and internal mechanism of the front-end control environmental regulation on the export product quality of manufacturing firms. Utilizing the propensity score matching plus difference-in-differences (PSM-DID) method, and based on the export panel data of manufacturing firms, this research provides more in-depth and robust evidence that the policy has led to a significant improvement in export product quality among regulated firms. Furthermore, it is revealed that technological innovation is the driving factor and the positive effect is more pronounced for processing trade firms. The conclusions enrich the evidence for the Strong version of Porter hypothesis, clarifying that the front-end control environmental regulation based on key energy users in developing countries can achieve the double dividend of environmental protection and quality upgrading, thus provide policy implications accordingly.