The Short-Run Effect of a Local Fiscal Squeeze on Pollution Abatement Expenditures: Evidence from China’s VAT Pilot Program

Peng, Fei; Peng, Langchuan; Mao, Jie; Lü, Peng

doi:10.1007/s10640-021-00539-z

Cited by 20 publications

(3 citation statements)

References 39 publications

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“…In terms of research methods, this paper used the continuous DID method to explore whether and how local fiscal pressure influences the environmental protection investment of enterprises. The continuous DID method has been widely used in studies of fiscal pressure [16,20,22]. The difference is that we used the COVID-19 epidemic as an exogenous shock to reflect the sharp change in local fiscal pressure.…”

Section: Discussionmentioning

confidence: 99%

“…To solve this problem, scholars have measured fiscal pressure through quasi-natural experiments of policy shocks. For example, scholars have used the rotated minister system [15], the reform of abolishing agricultural tax [16][17][18], the reform of income tax sharing [19], the "business tax to VAT" policy [20], the real estate purchase restriction policy and the reform of educational authority as exogenous shocks of fiscal pressure [21,22], and constructed quasi-natural experiments to measure the changes in fiscal pressure of local governments.…”

Section: Literature Reviewmentioning

confidence: 99%

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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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Section: Discussionmentioning

confidence: 99%

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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“…The State Council of China issued a notice on the reform program for the division of fiscal authority and expenditure responsibility between the central and local governments in the field of ecology and environment, which clarifies the division of fiscal authority and expenditure responsibility between the central and local governments in the field of ecology and environment, and further establishes the governance authority of local governments in ecological environmental protection and low-carbon development. Local fiscal expenditure, as a major funding source for local low-carbon governance, provides fiscal support for local governments to exercise their governance initiative and is an important instrument for achieving local government governance transformation (Peng et al, 2021). A longitudinal analysis of the fiscal data reveals that the environmental protection expenditure in China has experienced substantial growth since 2007, the year when the "Environmental Protection" fiscal account was established.…”

Section: Introductionmentioning

confidence: 99%

Local environmental fiscal expenditures, industrial structure upgrading, and carbon emission intensity

Zhang,

He,

2024

Front. Environ. Sci.

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To realize the development goals of environmental governance and low-carbon emission reduction, the effect of local environmental protection fiscal expenditure on carbon emissions needs to be assessed. This paper utilizes the panel data of 30 provinces in mainland China except Tibet from 2007 to 2019 and empirically examines the baseline effect, the mechanism, the nonlinear effect, and the spatial spillover effect of the local environmental protection fiscal expenditures affecting the intensity of carbon emissions by using the fixed-effects model, the FGLS model, the threshold panel model, and the spatial Durbin model. The results indicate that local environmental fiscal expenditure significantly lowers carbon emissions, generating a carbon reduction effect, and this finding remains robust under various checks; the mechanism analysis reveals that local environmental fiscal expenditure facilitates industrial structure upgrading, thereby indirectly producing a carbon reduction effect; the threshold analysis shows that the carbon reduction effect of local environmental fiscal expenditure exhibits a diminishing marginal tendency, and as the industrial structure continues to upgrade, the carbon reduction effect of local environmental fiscal expenditure displays an “Inverted U-shaped” pattern; the spatial analysis demonstrates that local environmental fiscal expenditure and carbon emissions have positive spatial autocorrelation, and local environmental fiscal expenditure in one region will induce a decline in carbon emissions in neighboring regions through spatial spillover effect. Based on the above results, this paper puts forward policy suggestions in terms of constructing a reasonable growth mechanism for local environmental protection financial expenditures, creating an ecological environment for low-carbon transformation, and constructing a reasonable regional coordination mechanism for carbon emission reduction.

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Environmental regulation, public environmental concern, and pollution reduction

Liu,

Zhou

2023

Manage Decis Econ

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Selecting the national water ecological civilization city (NWECC) policy as the starting point, this paper investigates whether environmental regulation might mitigate pollution discharge by the channel of public environmental concern. The results indicate that the NWECC policy has the effect of reducing pollution while significantly enhancing public environmental concern. The mediating effect analysis indicates that the NWECC policy reduces urban pollution via public environmental concern. The heterogeneity study shows that the pollution reduction effect of the NWECC policy is more apparent in cities with low economic development levels, low administrative levels, and low water resource endowments.

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The Short-Run Effect of a Local Fiscal Squeeze on Pollution Abatement Expenditures: Evidence from China’s VAT Pilot Program

Cited by 20 publications

References 39 publications

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

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

Local environmental fiscal expenditures, industrial structure upgrading, and carbon emission intensity

Environmental regulation, public environmental concern, and pollution reduction

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