Carbon emission reduction under import competition: a green breakthrough or burdened endeavor?

In the dual context of trade liberalization and the low-carbon transition, understanding how import competition shapes corporate carbon emissions has become a critical question. This study introduces an innovative “dual-track competition” framework and uses panel data of Chinese listed companies from 2010 to 2023 to examine the impact of import competition on corporate carbon emissions, yielding four key findings: First, import competition significantly increases firms’ carbon emissions. Second, import competition promotes green innovation, which reduces carbon emissions and generates a “green breakthrough effect.” However, it simultaneously reduces corporate energy utilization efficiency and compresses cost-plus markups, generating a “heavy burden effect.” Third, the emission-increasing impact of import competition is primarily driven by the dominance of the “cost-survival race” over the “green innovation race.” Finally, the emission-increasing effect of import competition is weaker for firms engaging in green mergers and acquisitions, firms facing relatively mild financing constraints, and firms operating in clean and low-technology industries. These findings provide important insights into the dual nature of import competition on carbon emissions, thereby advancing the understanding of how trade liberalization interacts with corporate environmental performance.