The impact of political connections on firm pollution: New evidence based on heterogeneous environmental regulation

Increasing attention has been focused on the extent to which corporate political connections influence the growing pollution due to the rapid growth in the popularity of firm pollution in developing countries.We adopt a static threshold regression model to investigate the effects of heterogeneous environmental regulation on political connections and firm pollution based on the panel data from China’s A-share listed companies from 2012 to 2019.The empirical results show a non-linear relationship between the degree of political connection of listed company executives and the level of firm pollution.And the relationship between the two roughly presents a U-shaped relationship under the action of the marketincentive environmental regulation threshold.However,it roughly presents an inverted N-shaped relationship under the action of the command-control environmental regulation threshold.Additionally,the group test results show that the existence of regional and ownership heterogeneity causes certain differences in the environmental behaviour of politically connected enterprises.These findings indicate that diverse environmental regulations are needed to promote sustainable green development and to further expand the theoretical and practical exploration of political connections on firm pollution.

Impact of Environmental Regulation on Industrial Upgrading: Analysis Based on Panel Data of 30 Provinces in China

Environmental regulation and industrial upgrading are the key to achieve win-win results for both economy and the environment. After environmental regulation tools are divided into market incentive and command control types,based on the provincial-level data of 30 provinces( cities and regions) in China from 2004 to 2016,the impact of environmental regulation on industrial upgrading and its transmission paths are empirically tested through an intermediary effect model. Technological innovation,FDI and capital market development all meet intermediary conditions,and the market incentive type is more dependent on technological innovation,while the command control type is more dependent on FDI and capital market development.The impact of the two environmental regulation tools on industrial upgrading is further studied. The results show that there is an " inverted U-shaped" relationship between the command control type and industrial upgrading,while there is a " U-shaped" relationship between the market incentive type and industrial upgrading,and there are also certain regional differences in the impact of environmental regulation on industrial upgrading.

Does strict environmental regulation enhance the global value chains position of China's industrial sector?

Given the vital importance of global value chains(GVCs)position for a country's international competitiveness,this paper tries to investigate the impacts of environmental regulation on the GVCs position of China's industrial sector.Using the latest value-added decomposition method,we first measure the GVCs position of China's industrial sector from 2003 to 2014.Subsequently,both two-stage least squares(2 SLS)method with panel data and mediating effect model are employed to empirically examine the effects of environmental regulation on China's position in GVCs.The results indicate that environmental regulation has significantly upgraded the GVCs position of China's industrial sector,and the effect is more evident for the sub-sectors with originally lower GVCs position.The mediation effect test shows that increasing R&D investment is an important channel through which environmental regulation affects the GVCs position of China's industrial sector,which verifies the existence of the Porter hypothesis.Further analysis finds that the enhancement of GVCs position of China's industrial sector caused by environmental regulation is mainly achieved through reducing the backward GVCs position.

Impact of environmental regulations on the efficient control of industrial pollution in China

The continuous progress of industrialization is a fundamental cause of China’s increasingly severe environmental pollution problem.Improving the efficiency of industrial pollution control is an inevitable choice to effectively decrease pollution emissions,thus winning the battle of pollution prevention and control.In this paper,we used the stochastic frontier analysis(SFA)model to measure the provincial efficiency of industrial pollution control based on the input and output data of industrial pollution control of 29 administrative provinces in China from 2000 to 2017.On this basis,a spatial econometric model was used to explore the influence of environmental regulation intensity on the efficiency of industrial pollution control.In addition,the spatial spillover effect of pollution reduction was thoroughly examined.The results show that:(1)The efficiency of industrial pollution control in China has improved year by year,but the overall efficiency is still low,with the average value increasing from 0.165 in 2000 to 0.309 in 2017.Furthermore,there is significant regional heterogeneity with the highest efficiency level in the east and lowest efficiency level in the west.(2)By increasing the financial and material input,the efficiency of industrial pollution control has increased.However,the increase of human input has not been so helpful.(3)The global Moran’s I index is significantly greater than zero,indicating a strong spatial correlation and agglomeration in the efficiency of industrial pollution control,which is reflected in high-high agglomeration in the eastern region and low-low agglomeration in the western region.(4)Stringent environmental regulation has a positive effect on improving the efficiency of industrial pollution control.It also imposes a positive spatial spillover effect,indicating a strategic interaction and coordination of regional pollution control.In line with this,related proposals have been made to optimize the investment structure for environmental pollution control,establish a flow mechanism for the factor market,and strengthen the environmental responsibility awareness of state-owned enterprises.On this basis,we expect to provide a policy for improving the efficiency of industrial pollution control and promoting regional joint pollution control in China.

The mechanism and heterogeneity of environmental regulations'impact on the technological progress of dairy farming

The study analyses the theoretical mechanism through which environmental regulation affects the dairy industry’s technological progress,with a particular focus on how the effect is conditional on farm size.Using the input–output data of dairy farms of different sizes from 2009 to 2019 in 10 Chinese provinces/autonomous regions in China and the quantitative measurement index of environmental regulation,the study estimates environmental regulation’s heterogeneous influences on the dairy industry’s technological progress by dynamic panel data models.The empirical results suggest that,first,environmental regulation has a U-type influence on the technological progress of dairy farming.The U-type influence means moving from pollution control’s high cost and low technology progress to the high profit and high innovation input generated by optimizing the breeding structure.Second,the promotion of dairy farming technology depends on farm size.The effect of environmental regulation on technological progress in moderately large-farms showed a U-type relationship.In contrast,the effect in free-range and large-size dairy farms showed a linear and positive relationship.The government should further strengthen environmental regulation based on advancing moderately large-farms in compliance with market mechanisms in the long run.Particular attention should be paid to the forms of environmental regulation so that dairy cattle breeding technology can break through the inflection point of the“U”curve as soon as possible and ensure the significance of the rising stage.Along the way,technical support should be provided for realizing environmental protection and economic growth.

Environmental regulation and firms'performance:a quasi-natural experiment from China

This paper investigates whether environmental regulation affects firm's performance including productivity,wage and employment using firm-level data in 1996-2007.The identification uses Two Control Zones(TCZ)policy implemented by the Chinese government in 1998,in which tougher environmental regulations were imposed in TCZ cities but not others.By difference-indifferences estimation,we find that tougher environmental regulation leads to larger increase on both total factor productivity and wage,and firms tend to employ fewer workers under pressure of environmental protection.Heterogeneous tests show that the impacts are better for nonpollution intensive firms,non-exporters and SOEs.Finally,we find that R&D input and exiting firms among industry are the driving forces for enhancing TFP and increasing wage and unemployment.

The impact of environmental regulation on total factor productivity of firms:An analysis based on technical distance

Most studies on environmental policy and total factor productivity(TFP)growth under the heterogeneity framework tend to ignore the distance to the technical frontier,while research that investigates TFP growth based on technical distances does not tend to consider environmental policy.To fill this research gap,this study investigates the impact of environmental regulation on the total factor productivity of heterogeneous firms,based on technical distance.In addition to theoretical analysis,we apply a two-direction fixed effects model to test the impact using firm-level data selected from the CSMAR database and environmental regulation data of 287 Chinese cities between 2007 and 2015.We report two major findings from our analysis.First,environmental regulation increasingly enhances(or hinders)TFP growth,as firms get closer to(or further away from)the country-industry technology frontier,ceteris paribus.Second,grouped regression further highlights that environmental regulation affects TFP growth for heterogeneous firms.For proximal-type firms,environmental regulation promotes the growth of TFP through innovation and imitation mechanisms,while only the imitation mechanism works for middle-type firms.Neither mechanism,however,applies to distal-type firms,for whom environmental regulation hinders TFP growth.These conclusions provide a theoretical and practical basis for environmental policy,suggesting that the focus should be directed toward improving exit mechanisms for distal-type firms,creating a favorable market environment to accelerate the convergence of middle-type firms to the frontier,and encouraging proximal-type firms to innovate to catch up with or surpass the global frontier.

Can environmental regulations achieve both profitability and profit quality?A natural experiment based on the China Cleaner Production Standards

Numerous studies evaluated the effects of end-of-pipe control environmental regulations(EER).However,few scholars discussed the effects of process management environmental regulations(PER),such as the China Cleaner Production Standards(CCPS)implemented by the country's Ministry of Ecology and Environment.Using data on China's manufacturing enterprises,this paper adopts the CCPS policies as quasi-natural experiments and uses differences-in-differences(DID)methods to analyze their effects on enterprise profitability and profit quality,respectively.The results show that:first,the CCPS significantly improve both profitability and profit quality;that is,the implementation of the environmental regulation policy plays a significant role in improving enterprise profit rates and cash flows.Second,for the profitability mediator effects,the short-term Porter effect of CCPS is not significant but shows the opposite during the lag period and significantly reduces the management cost and wage levels,comprehensively promoting enterprise profitability.Third,for the profit quality meditator effects,environmental regulations improve the enterprises'cash flow by reducing management costs and increasing government subsidies;however,its effect on bank credit subsidies is not significant.Fourth,for the moderator effects,the environmental regulations'effect on enterprises profitability and profit quality depends on the strategic interaction among local governments,the scale and ownership of the enterprise,and regional differences.That is,the strategic interaction weakens the effect of environmental regulations on enterprise performance.Environmental regulations have a stronger influence on profitability and profit quality for large-scale,state-owned,and coastal enterprises.

Environmental regulation,hidden economy,and China's outward foreign direct investment

The need to balance economic growth and its environmental impact continues to be a serious issue in China.As environmental regulation in China increases in importance,it is critical to understand how it impacts economic growth drivers such as outward foreign direct investment(OFDI)to formulate effective policies.One consideration should be the hidden economy,which can weaken the effects of environmental regulation on OFDI.This study investigates the scale of the hidden economy in 30 provinces and province-level municipalities in China in the period 2004 to 2015.The study uses the multiple indicators and multiple causes(MIMIC)model and the systematic generalized method of moments(GMM)test to analyze the impact of environmental regulation and the hidden economy on China's OFDI.The results show that stronger environmental regulation promotes OFDI.However,the hidden economy inhibits China's OFDI,as the positive effects of environmental regulation that drive OFDI are distorted.From a regional perspective,stronger environmental regulation promotes OFDI as well,while the hidden economy inhibits it.The interaction between environmental regulation and the hidden economy also inhibits it significantly.

Environmental improvement or industry enhancement?A case study on the impact of environmental regulations on Chinese automobile industry

Developing countries are encouraged to pursue environmental protection and industrial development simultaneously,although it is a big challenge to reach win-win situation.This study explored the relationshipbetween environmental regulations and the industry enhancement in developing countries through conducting an empirical analysis of the impact of environmental regulationson Chinese automobile industry.In the empirical analysis,a total of64Chinese automobile enterprises were investigated,the Malmquist index of total factor productivity was adopted to determine the productivity of Chinese automobiles,and the two-step system Generalised Method of Moments(GMM)estimation was used for the regressionanalysis.The resultsshowedthat environmental regulations negatively affected the productivity and technology of Chinese automobile industry during 2004-2018.The production costof automobile industry in China was rising sharply,and the productivity and technological progress of Chinese automobile industry were impeded significantly.The case of Chinese automobile industry illustrated that strict environmental requirements can negatively impact industry productivity by increasing production costs and squeezing industry profits.

Relationship between R&D investment and business performance from the perspective of environmental regulation: Takeing the heavy-polluting industries from 2011 to 2016 as an example

In recent years, China has promulgated many laws and regulations of environmental protection, gradually forming an environmental regulation system, and most enterprises are under the dual pressure of environmental protection and business performance. It would be a significant way that enterprises undertake R&D activities for a change. This paper is based on the Shanghai and Shenzhen A-share listed heavy pollution enterprises in 2011-2016, which is based on the review and summary of research results of former researchers, combining with current environmental regulation situation of our country, raising the relevant hypothesis between environmental regulations, R&D investment and business performance against heavy pollution industry. Adopting the method of empirical research, it also built the linear regression model which employs the relevant financial data of heavy-polluting enterprises in China as the statistical research sample. The relationship for heavy-polluting enterprises affected by environmental regulations between environmental protection R&D investment and enterprise business performance was tested. The results show that there is a positive influence on the environmental R&D investment and business performance, and a lag effect upon the R&D investment of enterprises to business performance. Finally, the research results were used to evaluates problems existing in the R&D investment on pollution industry in China as well as business performance and we put forward some suggestions on improving environmental regulation standards and technology innovation consciousness as well as optimizing the structure of R&D investment.

Does Environmental Regulation Increase Employment? Based on the SCM and RCM Methods

Whether environmental regulation can increase employment is still controversial in academic circles around the world.An important reason lies in the validity of an empirical method.Using China’s inter-provincial panel data from 2003 to 2015 and the synthetic control method(SCM),this paper focuses on a test that was carried out on the basis of a quasi-natural experiment of the 2007 Emission Trading Pilot(ETP)policy.The test results show that the ETP policy has increased the average employment level by 3.25 percentage points and passed a robustness test.The robustness test using the regression control method(RCM)shows that the average employment level has risen by 3.21 percentage points.This means that the ETP policy has significantly increased employment.The paper also puts forward three policy recommendations:optimizing the trading system for emissions rights,encouraging companies to carry out cleaner production and innovation,and incorporating environmental performance assessments.

The role of green industrial transformation in mitigating carbon emissions:Exploring the channels of technological innovation and environmental regulation

The industrial sector is vital to economic progress,yet industrial pollution poses environmental and economic concerns.The purpose of the study was to investigate the influence of green industrial transformation in re-ducing Pakistan’s carbon intensity between 1975 and 2020.Carbon emissions are considered an endogenous construct,while foreign direct investment(FDI)inflows,technological innovation,green industrial transforma-tion,environmental legislation,and research and development(R&D)investment are possible mediators.The association between variables is assessed using the robust least-squares approach.Green industrial transforma-tion is connected with lower carbon emissions,yet technical innovation,R&D investment,and inbound FDI raise a country’s carbon emissions.The findings support the pollution haven hypothesis in a country.The causality esti-mates indicate that inward FDI contributes to environmental regulations;green industrial transformation directly relates to inbound FDI and R&D expenditures;and technological innovations correspond to inbound FDI,R&D ex-penditures,industrial ecofriendly progression,and environmental standards.According to the impulse response function,environmental policies are anticipated to have a differential effect on carbon emissions in 2023,2024,2028-2030,while they are likely to decrease in the years 2025-2027 and 2031 forward.Additionally,inward FDI and technology advancements would almost certainly result in a rise in carbon emissions over time.Green industrial transitions are projected to result in a ten-year reduction in carbon emissions.The variance decomposi-tion analysis indicates that eco-friendly industrial adaptations would likely have the largest variance error shock on carbon emissions(11.747%),followed by inbound FDI,technological advancements,and regulatory changes,with R&D spending having a minimal impact over time.Pakistan’s economy should foster a green industrial revolution to avoid pollution and increase environmental sustainability to meet its environmental goals.

The Spillover Effects of Environmental Regulations:A Perspective of Chinese Unregulated Firms'Tax Burden

Previous studies focus on the direct impacts of environmental regulations while paying less attention to spillover effects.Taking the Eleventh Five-year Plan in China as a quasi-natural experiment,our results show that environmental regulations significantly increase the tax burden of unregulated frms.Environmental regulations generate spillover effects on firms that should not be subjected to regulatory policies.Further channel analysis shows that the fiscal pressure of local governments caused by environmental regulations is a major channel for the increase in the tax burden of unregulated firms.Finally,according to the heterogeneity results,the spillover effects are more pronounced in small firms,non-state-owned enterprises,and provinces with stricter enforcement.Our findings emphasize the additional costs of environmental policies,and the government should consider these costs when formulatingpolicies.

Impacts of Market-based Environmental Regulation on Green Total Factor Energy Efficiency in China

This study employed a difference-in-differences design to assess the effect of marketbased environmental regulation on green total factor energy efficiency(GTFEE)in a quasi-natural experiment that investigated China's carbon emissions trading scheme(ETS).The empirical results show that ETS had a positive effect on GTFEE.A series of robustness tests revealed that the results were robust.Potential mechanisms through which ETS can improve GTFEE include the promotion of technological innovation and the upgrading of industrial structure.The positive effects varied in different cities and diferent regions-the result was pronounced in eastern China and developed cities,but it was insignificant in central and western areas and developing cities.This study confirms the satisfactory performance of China's ETS in improving GTFEE,and this is relevant for other emerging countries.

Airborne PCDD/Fs in two e-waste recycling regions after stricter environmental regulations

Since the 2010 s, the authorities of Guangdong province and local governments have enhanced law enforcement and environmental regulations to abolish open burning, acid washing, and other uncontrolled e-waste recycling activities. In this study, ambient air and indoor dust near different kinds of e-waste recycling processes were collected in Guiyu and Qingyuan to investigate the pollution status of particles and polychlorinated dibenzo-pdioxins and furans(PCDD/Fs) after stricter environmental regulations. PM_(2.5) and PCDD/Fs both showed significantly reduced levels in the two regions compared with the documented data. The congener distribution and principal component analysis results also confirmed the significant differences between the current PCDD/Fs pollution characterizations and the historical ones. The estimated total intake doses via air inhalation and dust ingestion of children in the recycling region of Guiyu ranged from 10 to 32 pg TEQ/(kg·day), which far exceeded the tolerable daily intake(TDI) limit(1–4 pg TEQ/(kg·day). Although the measurements showed a significant reduction of the release of PCDD/Fs, the pollution status was still considered severe in Guiyu town after stricter regulations were implemented.

The Difference Effect of Environmental Regulation on Two Stages of Technology Innovation in China's Manufacturing Industry

This paper divides technological innovation into two stages:technology development and technology transfer.Then the authors use the panel data of 28 manufacturing industries during 2003–2012 to test the econometric regression model for the industry of the sub stages,which is a regulation on technological innovation in the environment.The results show that:(1) environmental regulation has a significant role in promoting China's manufacturing technology research patent achievements,and technology into new products,and this indicated that"Porter hypothesis" in the manufacturing sector has been verified;(2) R&D and transfer expenditure have a positive impact on technological innovation.Finally,the authors put forward the corresponding policy recommendations for industry of the environmental regulation on the impact of technological innovation in phases.

Air Pollution, Environmental Regulations and Economic Growth——Estimation of Simultaneous Equations Based on Panel Data of Prefecture-Level Cities

The article selects the panel data of 289 prefecture-level and above cities in China from 2003 to 2017, establishes simultaneous equations and uses the 3 SLS estimation method to study the relationship between air pollution and economic growth. On the whole, industrial sulfur dioxide and soot emissions have an inverted U-shaped relationship with per capita GDP, and the increase in sulfur dioxide emissions has played a significant role in hindering economic growth. From a regional perspective, the sulfur dioxide emissions in the eastern and western regions conform to the environmental Kuznets curve, and the per capita GDP at the turning point in the western region is significantly lower than the overall national level. The smoke and dust emissions in the eastern, central and western regions all conform to the environmental Kuznets curve, while the per capita GDP at the turning point in the western region is significantly lower than that in the eastern and central regions. In the eastern region, both sulfur dioxide and smoke and dust emissions significantly hinder economic growth,and this hindrance is mainly caused by the spatial transfer of labor. Through further analysis, it is found that environmental regulations can significantly suppress the negative impact of air pollution on economic growth. Finally, the article puts forward some suggestions, such as environmental governance according to local conditions and strengthening environmental regulations.

Impact of Environmental Regulation on Green Technological Innovation:Chinese Evidence of the Porter Effect

When pursuing regional pollution control through environmental regulation in China, the region may face new problems such as the relocation of polluting industrial facilities and redirection of investment to other fi elds. In order to test the effectiveness of relevant regulatory measures, this paper examines the relationship between environmental regulation and green technological innovation based on provincial panel data. A major fi nding is that collecting pollutant discharge fees and increasing government spending on environmental protection are more effective than meting out environmental administrative punishment and promulgating local environmental rules and regulations. Therefore, the key to promote green technological innovation through environmental regulation lies in the choice of regulatory tools. Generally, fi nancial instruments, taxes, fees and other market-based environmental regulation tools are more suitable for the specifi c conditions in China. Test of the mediating effect shows that pollutant discharge fees and government spending on environmental protection can force enterprises to step up R&D efforts, and thus boost green technological innovation, and that the role of these two tools in pushing for green technological innovation exhibits a threshold effect as their influence grows from weak to strong and from insignificant to significant. It is noteworthy that severe environmental administrative punishment hinders green technological innovation and that local environmental rules and regulations have no significant impact on green technological innovation regardless of their intensity. In order to strengthen environmental governance and promote green technological innovation, it is necessary to build a market-based environmental regulation system, lay stress on relevant top-level design, and appropriately increase the intensity of environmental regulation.

Research on the Theory of Governmental Environmental Regulatory Responsibility

In recent years,the environmental pollution caused by the rapid development of tourist attractions has increasingly become the focus of society,which has triggered scholars to think about the government's responsibility for environmental regulation,and has generated a variety of theories in the academic world.For example,the stakeholder theory extends corporate governance to the regulation of tourism scenic spots,and achieves the purpose of perfecting the environmental regulation of tourism scenic spots by continuously enriching the scope of stakeholders'subjects;the property rights theory analyzes the transaction costs generated by various economic activities in the regulation of tourism scenic spots from macro and micro perspectives,and the public goods theory clarifies the concept,types and characteristics of tourism scenic spots as public goods.Therefore,based on stakeholder theory,property rights theory and public goods theory,this paper explores and clarifies the content of the government's responsibility in the environmental regulation of tourism scenic spots,and tries to further enrich the theoretical results of the government's environmental regulation responsibility,in order to provide new ideas for the sustainable development of tourism scenic spots from the theoretical point of view.