Trade and Energy Efficiency Theory and Product-Level Evidence from China

Some existing studies start to discuss how trade will change environment from country perspective or province perspective. Up to now, only a small number of studies provide evidence on from product level. In this research, we study environmental effects of intermediate inputs importing and capital inputs importing. Constructing the micro theoretical model, this paper discusses how product trading will change energy efficiency. This research uses Chinese enterprises’ data to conduce empirical tests. Our results suggest importing intermediates and capital inputs could both increase enterprise’s productivity, thereby improving its energy efficiency. Altogether, our research provides new evidence about relationship between trade and environment from perspective of product trade. This gives important implications for achieving goals of carbon peak and carbon neutralization