Foreign waste ban and green development of Chinese manufacturing industry: Comprehensive evidence based on provincial data

Abstract

Since the reform and opening up, imported solid wastes have pushed China's economic growth while also bringing about serious environmental problems. In this context, China has introduced a ban on “foreign waste” for imported solid waste. Based on the provincial panel data from 2010 to 2020, this paper calculates the Green Total Factor Productivity (GTFP) of the manufacturing industry to measure the level of green development of the manufacturing sector, and evaluates the comprehensive impact of the “foreign waste” ban on the green development of the manufacturing industry by using the continuous Difference-in-Differences method. The study finds that the foreign waste ban greatly promotes the greening of China's manufacturing sector, mechanism analysis shows that foreign waste ban stimulates innovation by innovation effects and increases production cost by cost effects, and the policy effect has heterogeneity as it is more prominent in coastal areas, areas with a lower proportion or a higher level of green development. This result suggests that the promotion of domestic solid waste recycling should be accompanied by further guidance on efficient factor mobility, with different measures based on regional heterogeneity.

Keywords

• Foreign waste
• Solid waste imports
• Environmental regulation
• GTFP