Does environmental regulation of export destinations affect export quality? Evidence from an emerging economy

This paper examines the nonlinear impact of environmental regulations in export destinations on the export quality of Chinese manufacturing goods using the CEPII-BACI database (2001–2021). This study reveals that environmental regulations in destination countries have an inverted U-shaped effect on the quality of Chinese manufacturing exports through the combined effects of the innovation effects, crowding-out effects, and constraint effects. In addition, the scale of imported intermediate products and foreign direct investments into China have a moderating role on the inverted U-shaped relationship, shifting the inflection point of the curve to the left and flattening it. This study deepens the understanding of the spillover effects of cross-border environmental policies and their effects on export quality.