Trade Openness and Haze Pollution in China: The Moderating Role of Environmental Regulation

Abstract

Using panel data from 30 Chinese provinces spanning 2003-2019, the relationship between trade openness and haze pollution, moderated by environmental regulation, was investigated through spatial econometric models. It was observed that the effect of trade openness on haze pollution was negative, albeit insignificant, suggesting that trade openness alone did not markedly influence haze reduction in China. Contrarily, environmental regulation, while intensifying haze pollution, displayed a significant moderating role. When combined with environmental regulations, trade openness showed potential in mitigating haze pollution, thus enhancing environmental quality. Although trade openness did not display significant regional variance in its impact on haze pollution, considerable regional disparities were found in the effects of environmental regulation on haze pollution and its moderating influence on the trade openness-haze pollution relationship.