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[This chapter explores how the local reacts to the shift of environmental burdens by export upgrading. It proposes that the environmental improvement by export upgrading depends on the combination of global linkages (the way to upgrade) and local linkages (agglomeration and institution). Then, this chapter applies the decomposition of export sophistication to quantify diverse upgrading ways. To indicate the local linkages, this chapter categorises the sample into groups by their specialisation in polluting sectors and their stringency of environmental regulation. Empirical findings suggest that environmental improvement by export upgrading in China manifests a displacement effect largely. Exporting sectors tend to change their product mix to avoid environmental costs. On the contrary, the role of efficiency promotion is still insignificant. Local linkages alter the environmental effects of export upgrading. Agglomeration externalities allow exporting sectors to be more capable of changing product mix, while environmental regulation imposes additional costs and thereby guarantees the desirable effects of upgrading on the environment.]
Published: Oct 18, 2020
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