The impact of environmental regulation on firm performance: Evidence from the Chinese cement industry

In this study, we examine the effects of a special period regulation (SPR), implemented in the Chang-Zhu-Tan (Changsha City, Zhuzhou City, and Xiangtan City; CZT) region, regarding medical expenses paid by the Urban and Rural Resident Basic Medical Insurance (URRBMI) and Urban Employee Basic Medical Insurance (UEBMI) programs, using a difference-in-differences (DID) design. We find that the SPR significantly reduces medical expenses in the CZT region, which appears to be driven by improved air quality. Furthermore, this regulation has a significantly negative and positive impact on medical expenses paid by the UURBMI and UEBMI, respectively. In summary, our results provide empirical evidence for the orderly implementation of command-and-control environmental regulation policies from the perspective of health benefits.

Section: Resultsmentioning

confidence: 99%

RETRACTED: The Effects of Environmental Regulations on Medical Expenses: Evidence from China

Tan

Xia

2022

“…Tang [ 15 ] studied that environmental control regulations have had an adverse impact on small enterprises, state-owned enterprises, and enterprises in western and eastern China. Wang [ 16 ] studied that environmental regulation will indirectly restrict the improvement of industrial total factor productivity. The increase of environmental regulation intensity is not enough to make up for the resulting regulation compliance cost of enterprises, which will eventually reduce total factor productivity.…”

Section: Literature Reviewmentioning

confidence: 99%

“…They constructed a comprehensive index based on pollutants removal rate to measure the local environmental regulation, including some index such as removal of industrial dust and sulfur dioxide. In this paper, the environmental regulation index system uses three indicators: industrial wastewater emission, industrial sulfur dioxide emission and industrial smoke (powder) dust emission [ 16 , 17 ].…”

Section: Theoretical Mechanism and Research Designmentioning

confidence: 99%

Research on Environmental Regulation and Green Total Factor Productivity in Yangtze River Delta: From the Perspective of Financial Development

Tang

Tenkorang

et al. 2021

This paper employs the global Malmquist Luenberger (GML) index and the System Generalized method of moments (GMM) estimation method to investigate the influence of both environmental regulation and financial development on green total factor productivity in 41 cities of the Yangtze River Delta (YRD) in China from 2003–2019. We select the relevant input-output data to measure the green total factor productivity (GTFP) and its decomposition index including undesirable output. The results show that the GTFP and its decomposition index in the YRD have a slow fluctuating upward trend. The YRD mainly depends on improving the level of technological progress and environmental governance to promote the improvement of regional economic green development level. The empirical research results show that there is an inverted U relationship between environmental regulation and GTFP in the YRD, too strict environmental regulation will inhibit the growth of green total factor productivity. By adding control variables, the inflection point of environmental regulation is 0.5034, which is lower than that without control variables. There is a strong interaction and superposition effect between financial development and environmental regulation, which is closely related to the established financial cooperation mechanism, perfect financial system arrangement and cross-regional financial cooperation platform in the YRD. Government intervention should be reduced, the introduction of foreign capital should be controlled appropriately, foreign capital should be guided to green industries, and the use efficiency of foreign capital should be improved. This paper holds that we should pay attention to the strength of environmental regulation, prevent overcorrection, increase the guidance of credit funds, deepen the reform of the financial system, appropriately intervene in the market by the government, strengthen the guidance of foreign capital, and promote the development and transformation of the green economy in the YRD region with the help of several policies.

“…Some economists posited that ERG has no significant influence on FP [ 8 , 10 , 11 ]. Furthermore, some researchers concluded that ERG worsens corporate revenue and performance through an increase in the firm’s environmental costs [ 12 ], regulatory costs [ 13 ], and bargaining power [ 14 ]. One explanation for the counter-evidence to the PH is the duration of ERGs.…”

Section: Introductionmentioning

confidence: 99%

Mediation Effect of Corporate Tax Burden and the Relationship between Environmental Regulation and Firm Performance

Dai

Huang

Zhang

et al. 2022

This paper took the panel data of 1052 heavily-polluting listed companies from both the Shanghai and Shenzhen Stock Exchange from 2010 to 2017 to empirically analyze the impact of environmental regulation (ERG) on firm performance (FP). The article introduces a mediating effect model to test the mediating role of corporate tax burden (ETR) within the relationship between ERG on FP. The results showed that: (1) ERG has exerted a significant enhancement effect on the performance of heavily polluted firms via the ETR reduction mechanism. (2) The mediating effect of ETR depends on the duration of ERG. A significant time lag exists before the mediating effect starts to work, and the magnitude of the mediating effect increases with the time lag from the execution of the ERG. (3) The mediating effect of ETR varies significantly with the nature of corporate property rights. It is significant for the state-owned firms, while for non-state-owned firms, there is no evidence supporting the existence of the mediating effect of ETR despite ERG still having a significant direct-impact on FP. Based on these findings, we discuss the policy suggestion to optimize the impact of environmental regulation policies in terms of incentivizing the green development of polluting firms.