LAUSR

Abstract Environmental protection and international trade are main issues related to human development and well-being. Under the dual pressure of pollution control and foreign trade restructuring, environmental regulation is essential for achieving results in environmental protection and trade transformation. This study analyzes the influences of environmental regulation on the low-carbon transformation of China’ foreign trade from the perspective of export enterprises’ dual margin. Under the framework of profit maximization, this study establishes a simplified dynamic discrete choice model to study the two-stage decision-making process of export enterprises and the role of environmental regulation. Based on data from Chinese industrial enterprises, this study uses the Heckman model to evaluate the impact of environmental regulation on trade volume and structure. Our principal conclusions are as follows. First, environmental regulation may restrain the export-extensive and -intensive margin, where the negative effect on pollution-intensive enterprises is stronger than that of clean ones. Second, the type of ownership may affect the effectiveness of environmental regulation. In addition, survival analysis shows that environmental regulation will shorten the export duration for enterprises, especially for pollution-intensive ones. Results show that the negative effect of environmental regulation on pollution-intensive firms is stronger than that on clean enterprises. Therefore, government departments in China should improve and develop environmental policies and further strengthen environmental monitoring capabilities to achieve the structural adjustment and low-carbon transformation of China’s foreign trade.