The influence of China's pollution emissions trading system on the listed companies' export products' quality.

The pollution emissions trading system (PETS) pilot policy is China's first large-scale implementation of market-based environmental regulations; whether it can reduce pollution emissions and improve the export competitiveness is crucial for China to achieve the coordinated development of environment and economy. Based on the panel data of Chinese listed companies from 2003 to 2016, this paper considers the PETS pilot policy as a natural experiment, and investigates the impact of the policy on export products' quality using the difference-in-difference (DID) model. We found that (1) the PETS pilot policy has significantly improved the quality of listed companies' export products. (2) Technological innovation plays a partial intermediary role in promoting export products' quality by the PETS pilot policy; the "Porter Hypothesis" has been verified in China. (3) When the listed companies with different characteristics face the PETS pilot policy, the quality of their export products will show a differentiated development trend. Based on the above research conclusions, we put forward corresponding recommendations for China to realize the coordinated development of environment and trade.