This research investigates urban carbon emission efficiency in China, revealing how free trade zones enhance outcomes through market dynamics.
This research investigates the relationship between trade liberalization and the reduction of carbon emissions using a panel data set of Chinese prefecture-level cities (2006–2019). A time-varying difference-in-differences model is used to determine the effects of Free Trade Zones (FTZs) as a quasi-natural experiment on carbon emissions. Results reveal pronounced enhancement of carbon emission efficiency (CEE) following FTZ establishment, especially in eastern China. Mechanism tests show that the impact of FTZs on carbon emission reduction is positively modulated by industrial structure upgrading, innovation level, and the efficiency of market and capital resource allocation.
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Jiang et al. (2026) studied this question.
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