Does Fiscal Stress Improve the Environmental Efficiency? Perspective Based on the Urban Horizontal Fiscal Imbalance

Sun, Youshuai; Zhu, Dongqing; Zhang, Zhen Yu; Yan, Na

doi:10.3390/ijerph19106268

Cited by 6 publications

(4 citation statements)

References 52 publications

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“…This means that FP can influence the EGE of local governments by changing their behavioral preferences between EGC and ER. There are studies [ 73 , 74 ] that found the adverse effects of FP on EGE, which are consistent with our findings. However, these studies paid less attention to whether the behavioral preferences of local governments intervene in this influence relationship.…”

Section: Discussionsupporting

confidence: 93%

The Interaction Mechanism of Fiscal Pressure, Local Government Behavioral Preferences and Environmental Governance Efficiency: Evidence from the Yangtze River Delta Region of China

Wang

et al. 2022

IJERPH

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In environmental governance, local governments are the main actors, and their behavioral preferences between economic growth competition (EGC) and environmental regulation (ER) affect the inputs and outputs of environmental governance. Most studies discuss the relationship between government behaviors and the environment from the fiscal decentralization perspective, with few studies from the fiscal pressure (FP) perspective. Importantly, the bidirectional interaction mechanism is easily ignored. This study measured local government FP, EGC, ER, and environmental governance efficiency (EGE) in China’s Yangtze River Delta (YRD) region from 2000 to 2020. Moran’s I index was used to identify the change characteristics of local government behavioral preferences. The interaction mechanism was analyzed by a panel vector autoregression (PVAR) model. The results show that (1) from 2000 to 2020, FP was generally strengthened. EGE generally showed fluctuating and rising change characteristics, with more obvious fluctuating and rising characteristics before 2012 and after 2012, respectively. Local governments shifted from a strong alternative preference to a weak synergistic preference. (2) FP had a self-reinforcing effect. EGC and ER had a self-weakening effect. EGE had not only a self-weakening effect but also a weak self-dependence. (3) There is a double negative interaction mechanism between FP and local government behavioral preferences. FP made local governments prefer to reduce EGC and relax ER, but in fact, EGC and ER were conducive to alleviating FP. (4) There is a negative transitive influence mechanism between FP, local government behavioral preferences and EGE. The negative effect of FP on EGE can be transmitted by reducing EGC and ER. This paper provides a scientific basis for improving EGE in the YRD region and understanding the behavioral logic of local governments’ environmental governance and a reference for other rapidly industrializing and urbanizing regions.

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Section: Discussionsupporting

confidence: 93%

The Interaction Mechanism of Fiscal Pressure, Local Government Behavioral Preferences and Environmental Governance Efficiency: Evidence from the Yangtze River Delta Region of China

Wang

et al. 2022

IJERPH

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“…It also reduces the environmental governance efficiency of the local government. The greater the fiscal pressure, the lower the local government's environmental governance efficiency [31].…”

Section: Literature Reviewmentioning

confidence: 99%

Local Fiscal Pressure and Enterprise Environmental Protection Investment under COVID-19: Evidence from China

Liu

Ren

2023

Sustainability

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Increasing local fiscal pressure and insufficient enterprise environmental protection investment are considerable problems in China. Based on the data of A-share-listed companies in heavily polluting industries in China from 2015 to 2021, this paper uses COVID-19 as an exogenous shock of local fiscal pressure and investigates the impact of local fiscal pressure on enterprise environmental protection investment by the continuous DID method. The study found that local fiscal pressure significantly reduces enterprise environmental protection investment and has a greater impact on non-state-owned enterprises, large enterprises, enterprises located in the “two-control-zone” cities and enterprises located in cities with low fiscal self-sufficiency rates. The mechanism of analysis shows that local governments ease fiscal pressure by “increasing revenue” and “cutting expenditure”. The former increases the non-tax burden of enterprises, while the latter reduces enterprise environmental protection subsidies, which leads to a decrease in environmental protection investment. The findings of this paper indicate that it is necessary to focus on solving the local fiscal pressure dilemma to increase green investment and achieve green development.

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“…Ran et al [45] argue that the environmental decentralization system, which is good for improving the level of environmental governance must be based on a sound and sustainable fiscal policy platform. Sun et al [46] examine the impact of fiscal stress on environmental efficiency from the perspective of urban horizontal imbalance and emphasize that the resilience of the fiscal system has a driving effect on environmental governance. Wu et al [47] argue instead that the joint effect of local government competition and environmental decentralization produces the "race to bottom" effect, which reduces the efficiency level of regional green development.…”

Section: Literature Reviewmentioning

confidence: 99%

Favorable Fiscal Self-Sufficiency Enables Local Governments to Better Improve the Environmental Governance—Evidence from China’s Lower-Pollution Areas

Gu¹,

Tian²,

Zheng³

et al. 2022

Sustainability

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With the rapid development of industrial economy, local governments in China have invested a large amount of financial funds in environmental protection. In the era of widespread use of clean energy, local governments have a greater responsibility to coordinate fiscal policies with industrial development policies to improve regional environment. Local governments with large fiscal surpluses would make more efforts to improve environmental efficiency, rather than attract heavily polluting industrial enterprises to develop their local economies, and more likely to promote the use of clean energy equipment and raise environmental awareness in government. This paper focuses on testing the impact of abundant fiscal revenue of local governments on the efficiency of regional environmental governance with the data in all prefecture-level cities of China’s Guangdong province from 2001 to 2020. We estimate local environmental governance efficiency score with super-efficiency SBM method, taking unexpected output into account. Then we find that fiscal affluence has significant positive effect on the efficiency of environmental governance and the environmental awareness of the government also has obvious help in improving local environmental efficiency. We hope that these findings will provide practical help for local governments to improve their fiscal policy agendas and the quality of environmental governance.

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Does Fiscal Stress Improve the Environmental Efficiency? Perspective Based on the Urban Horizontal Fiscal Imbalance

Cited by 6 publications

References 52 publications

The Interaction Mechanism of Fiscal Pressure, Local Government Behavioral Preferences and Environmental Governance Efficiency: Evidence from the Yangtze River Delta Region of China

The Interaction Mechanism of Fiscal Pressure, Local Government Behavioral Preferences and Environmental Governance Efficiency: Evidence from the Yangtze River Delta Region of China

Local Fiscal Pressure and Enterprise Environmental Protection Investment under COVID-19: Evidence from China

Favorable Fiscal Self-Sufficiency Enables Local Governments to Better Improve the Environmental Governance—Evidence from China’s Lower-Pollution Areas

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