Foreign direct investment and discriminatory environmental enforcement: a firm level perspective

Deng, Qing

doi:10.1080/09644016.2020.1817257

Cited by 2 publications

(2 citation statements)

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“…Studies on regulatory disparities in the Chinese context are far fewer and often focus on firm characteristics such as ownership and financial situation (Wang et al . 2003; Wang & Wheeler 2005; Deng 2021). Our focus on fixed asset intensity advances this literature by presenting a new theory built around a local government's strategic calculation regarding firm mobility to curb pollution while avoiding loss in local economic growth.…”

Section: Introductionmentioning

confidence: 99%

“…Collectively these studies often demonstrate that race and income disparities affect regulatory enforcement in air and water pollution control and drinking water and waste disposal standards (Spina 2015;Switzer & Teodoro 2018). Studies on regulatory disparities in the Chinese context are far fewer and often focus on firm characteristics such as ownership and financial situation (Wang et al 2003;Wang & Wheeler 2005;Deng 2021). Our focus on fixed asset intensity advances this literature by presenting a new theory built around a local government's strategic calculation regarding firm mobility to curb pollution while avoiding loss in local economic growth.…”

Section: Introductionmentioning

confidence: 99%

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Fine me if you can: Fixed asset intensity and enforcement of environmental regulations in China

Cao

Deng

et al. 2021

Regulation & Governance

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Why do some firms face more environmental regulatory actions than others? We present a theory focusing on firm-fixed asset intensity. High fixed asset intensity makes a firm less mobile. A less mobile firm cannot present a credible exit threat, making it more susceptible to stringent enforcement. Analysis of key-monitored firms in Jiangsu province, China of 2012-2014 shows that higher fixed asset intensity is associated with more pollution levies and a higher chance of receiving a punitive action. This result holds in a battery of robustness checks and an instrumental variable analysis. Furthermore, our 2018 online survey of Chinese firm managers shows that those from high fixed asset intensity firms indeed consider their firms less mobile and they pay more environment-related operating costs. Finally, data from 2004 Chinese Firm-Level Industrial Survey demonstrate that fixed asset intensity is positively associated with pollution levies in a national sample of 201,926 manufacturing firms.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Fine me if you can: Fixed asset intensity and enforcement of environmental regulations in China

Cao

Deng

et al. 2021

Regulation & Governance

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Strategic Environmental Policies in the Presence of Differentiated Goods

Ramírez

Bravo

2022

Ensayos

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We develop a theoretical model of partial equilibrium where firms, located in a country, compete and produce differentiated goods in a duopolistic market. Emission of pollution is related to production, and firms produce their output using different levels of polluting technology. To control pollution emission, the government applies discriminatory pollution quotas considering the benefits for firms, consumers, and environmental damage. The results show that if the disutility to be polluted is very high, the government imposes a zero-emission quota on the companies. But, if such disutility is not significantly high, it allows a certain amount of emissions, imposing different quotas on firms depending on the levels of technology they use to control their emissions. The proposed model stresses the importance of the rational establishment of strategic environmental policies, which benefit all economic agents in the market, firms, consumers, and the environment. Resumen Desarrollamos un modelo teórico de equilibrio parcial donde las empresas, ubicadas en un país, compiten y producen bienes diferenciados en un mercado duopolístico. La emisión de contaminación está relacionada con la producción, y las empresas producen utilizando diferentes niveles de tecnología contaminante. Para controlar la emisión de contaminación, el gobierno aplica cuotas de contaminación discriminatorias teniendo en cuenta el beneficio para las empresas, los consumidores y el daño ambiental. Los resultados muestran que si la desutilidad a contaminar es muy alta, el gobierno impone una cuota de cero emisiones a las empresas. Pero, si dicha desutilidad no es significativamente alta, permite una cierta cantidad de emisiones, imponiendo diferentes cuotas a las empresas dependiendo de los niveles de tecnología que utilizan para controlar sus emisiones. El modelo propuesto subraya la importancia del establecimiento racional de políticas ambientales estratégicas, que actúen en beneficio de todos los agentes económicos en el mercado, las empresas, los consumidores y el medio ambiente.

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Foreign direct investment and discriminatory environmental enforcement: a firm level perspective

Cited by 2 publications

References 53 publications

Fine me if you can: Fixed asset intensity and enforcement of environmental regulations in China

Fine me if you can: Fixed asset intensity and enforcement of environmental regulations in China

Strategic Environmental Policies in the Presence of Differentiated Goods

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