Does Stronger Environmental Regulation Promote Firms’ Export Sophistication? A Quasi-Natural Experiment Based on Sewage Charges Standard Reform in China

Based on the quasi-natural experiment of sewage charges standard reform, this paper adopts a staggered difference-in-difference model to empirically investigate effect environmental regulation firms’ export sophistication and mechanism effect, using matched data from Chinese Annual Survey Industrial Firms Custom Trade databases 2004 2013. The results show that (1) policy reform significantly promotes upgrading sophistication; (2) impact is heterogeneous, in promotion mainly manifested simultaneous import firms, large-sized local firms; (3) through mechanisms innovation compensation product switching promote sophistication. This provides empirical evidence insights for governments formulate implement protection policies appropriately.