Research on the Relation between Foreign Trade and Green Economic Efficiency in Subdeveloped Region: Based on Data from Central China

Abstract

Foreign trade in subdeveloped regions may lead to serious environmental problems. The direct and possible indirect ways in which foreign trade correlates with green economic efficiency in subdeveloped regions are qualitatively analyzed. Empirical tests are conducted based on the data of 80 prefecture-level cities in Central China. Results show that: (1) Foreign trade in Central China has a significant parabolic type of relationship with green economic efficiency. (2) Foreign trade in Central China will indirectly correlate with green economic efficiency through stimulating industries agglomerated in big cities, changing the level of industrial specialization and adjusting policy and technical environments. Whether the indirect relation between foreign trade and green growth is positive is determined by the scale of foreign trade itself. (3) The relation between foreign trade and green economic efficiency in different cities of Central China is heterogeneous. From the perspective of spatial heterogeneity, the negative relation of cities along major rivers and cities not belonging to capital city groups is more significant. From the perspective of city characteristic heterogeneity, a parabolic type of relationship of foreign trade with green economic efficiency is significant in large cities or cities with a pleasant policy environment, whereas the relationship is negative in small and medium sized cities or cities with a high proportion of manufacturing. Policy implications are proposed.