Trade policy uncertainty and environmental performance of Chinese enterprises.

• Using the data of micro industrial enterprises and the quasi-natural experiment of the PNTR authorisation from the U.S. after China's accession to the WTO to investigate the impact of TPU decline on enterprise environmental performance. • Enterprises' SO2 emissions of enterprises in an industry with a large reduction in TPU after China obtained the PNTR authorisation from the U.S. will be reduced more than those of enterprises in an industry with less TPU reduction. • The decline in TPU helps reduce SO2 generation and strengthens enterprises' pollutants removal ability, thereby improving enterprises' front and terminal environmental performance. • The decline in TPU is conducive to improving enterprises' environmental performance under strong environmental regulation by local governments. Using the data of micro industrial enterprises and the quasi-natural experiment of the permanent normal trade relationship (PNTR) authorisation from the United States after China's accession to the World Trade Organization, this study investigates the impact of trade policy uncertainty (TPU) on enterprise environmental performance employing the difference-in-differences model. We found that the sulfur dioxide (SO2) emissions of enterprises in an industry with a large reduction in TPU after China obtained the PNTR authorisation will be reduced more than those of enterprises in an industry with less TPU reduction. The decline in TPU helps reduce SO2 generation and strengthen enterprises' pollutants removal, thereby improving enterprises' front and terminal environment performance. Under strong environmental regulation by local governments, the decline in TPU is conducive to improving enterprises' environmental performance. The impact of TPU decline mainly exists in the enterprises of high pollution industries, non-state-owned and the eastern area. [ABSTRACT FROM AUTHOR]