Environmental (de)centralization and local environmental governance: Evidence from a natural experiment in China

Gao, Chen; Xu, Jinglei; Yu, Qi

doi:10.1016/j.chieco.2022.101755

Cited by 39 publications

(13 citation statements)

References 41 publications

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“…Second, we see this study as furthering scholarly understanding of the fundamental question of what the outcome of a centralised environmental management system is. Prior studies have generated abundant findings on the environmental effect of environmental centralisation (Chen et al, 2022; Gudmundsson et al, 2019). Our research presents a fresh perspective on this question by examining environmental centralisation's effect on the productivity of heavily polluting companies and investigating the specific mechanisms involved.…”

Section: Discussionmentioning

confidence: 99%

The effect of environmental centralisation on productivity: Evidence from an administrative reform in China

Li,

Yang

2023

J of Intl Development

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This paper adopts a novel institutional perspective—environmental centralisation—to examine its impact on firm productivity in developing countries. In 2008, China's State Environmental Protection Administration was upgraded to the Ministry of Environmental Protection (MEP). This administrative reform strengthened the central government's ability to protect the environment, enabling it to address more environmental affairs and concentrate on environmental rights. Based on the quasi‐natural experiment of the establishment of the MEP, this study takes a new perspective on the impact of environmental centralisation on productivity. The difference‐in‐difference‐in‐difference approach is used for the first time to estimate the impact of environmental centralisation on productivity. We find that environmental centralisation caused by the establishment of the MEP significantly increased the productivity of heavily polluting companies, and a series of robustness tests confirm that the results are credible. We identify three possible mechanisms, namely, facilitating innovation, curbing rent‐seeking behaviour and inhibiting over‐investments. The policy implication of this study is that the effectiveness of environmental policy depends not only on the policy itself but also on the allocation of environmental rights among different levels of government.

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Section: Discussionmentioning

confidence: 99%

The effect of environmental centralisation on productivity: Evidence from an administrative reform in China

Li,

Yang

2023

J of Intl Development

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“…Environmental regulation of government has been extensively explored and there are three main perspectives. Some researchers argue that government regulation is effective in improving the environment because of the “compensatory effect” (Zhang et al 2020b ; Chen et al 2022a , b ). However, some researchers believe that environmental regulation harms enterprises’ interests and is not necessarily beneficial in terms of improvement of environmental quality (Shi and Xu, 2018 ; Zhang et al 2020a ).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Chang et al ( 2022 ) obtained that for every 1% increase in the level of inter-governmental synergistic governance, the concentration of PM2.5 decreased by 5.658 μg/m3. Chen et al ( 2022a ) demonstrated that the China Regional Environmental Protection Monitoring Centres can enhance environmental regulation cooperation among neighboring provinces and can significantly induce enterprises to reduce emissions. Another group of researchers suggests that the central government’s supervision of local governments should be strengthened.…”

Section: Literature Reviewmentioning

confidence: 99%

Invisible economy, performance assessment of local governments, and environmental regulation in China

Shen

Fan

Wang

et al. 2023

Environ Sci Pollut Res

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Currently, environmental regulation in China is characterized by partial improvement and overall deterioration of the environment. To investigate the impact of China’s environmental regulation on the country’s environment, we consider the invisible economy by constructing a Stackelberg game model between local governments and polluting enterprises based on the Chinese institutional structure. We derive the following findings: (1) Increasing the invisible economic production scale causes the enterprise to reduce the pollution control level, resulting in increasing total pollutant emissions. Increasing the invisible economy production scale increases the enterprise’s profit but undermines the utility of the local government. (2) The higher the proportion of environmental performance in the performance assessment of the local government is, the greater is the incentive for the local government to regulate the environment, which can force the enterprise to improve the pollution control level. However, there is an inefficient range for the proportion of environmental performance. (3) The lenient the pollutant emissions limit is, the weaker is the local government’s environmental regulation intensity and the enterprise’s pollution control level. (4) The higher the unit fine levied on the enterprise for excessive emissions is, the lower is the environmental regulation intensity of the local government, which can bring about improvement in the enterprise’s pollution control level and reduction in total pollutant emissions. The results of the study have positive effects on sustainable environmental regulation in China under the invisible economy.

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“…In the realm of environmental governance, scholarly focus has gravitated towards several key areas. Primarily, attention has been directed towards the intricate interplay between the central government and local governments [ [7] , [8] , [9] , [10] , [11] , [12] ]. Through the lens of organizational control, imperative adjustments are urgently required in terms of reallocating responsibilities, fine-tuning incentive mechanisms, and fostering transparent information channels within the vertical regulatory framework of environmental governance.…”

Section: Introductionmentioning

confidence: 99%

“…Under China's administrative system, environmental governance assumes a distinct territorial character, with local governments serving as the driving force behind policy implementation at the grassroots level. This dynamic consequently engenders pronounced variations across territories in the effectiveness of central environmental policy implementation [ 10 , 20 ]. Presently, local governments are compelled to prioritize economic growth over competing development objectives such as environmental protection due to the prevalence of promotion tournaments [ 20 , 21 ].…”

Section: Introductionmentioning

confidence: 99%

Challenging the nexus of power: The gaming dilemma of collaboration between government and enterprises in environmental management

Cao,

Zhang,

et al. 2024

Heliyon

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Environmental (de)centralization and local environmental governance: Evidence from a natural experiment in China

Cited by 39 publications

References 41 publications

The effect of environmental centralisation on productivity: Evidence from an administrative reform in China

The effect of environmental centralisation on productivity: Evidence from an administrative reform in China

Invisible economy, performance assessment of local governments, and environmental regulation in China

Challenging the nexus of power: The gaming dilemma of collaboration between government and enterprises in environmental management

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