The clean-up of Chinese manufacturing: examining the role played by changing techniques of production

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Abstract

We document the recent reductions in the pollution intensity of Chinese manufacturing and utilise the methods developed and applied by Levinson (2009, 2015) and Brunel (2017) to explain the underlying causes of this pollution clean-up. We find that, unlike in the US, compositional changes to the Chinese manufacturing sector have actually increased pollution emissions. This implies that the observed reductions in pollution intensities have been caused by large improvements in techniques of production driven by technology and/or regulations. The dominance of the technique effect in driving down pollution intensities is found whether we measure an ‘indirect’ technique effect or a direct effect using Laspeyres and Paasche indices.
Original languageEnglish
Pages (from-to)11-14
JournalEconomics Letters
Volume180
Early online date3 Apr 2019
DOIs
Publication statusPublished - Jul 2019

Keywords

  • Composition effect
  • Pollution intensity
  • Technique effect

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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