Skip to main content
main-content
Top

Hint

Swipe to navigate through the articles of this issue

28-07-2020 | Issue 1-2/2021

Public Choice 1-2/2021

New evidence on the soft budget constraint: Chinese environmental policy effectiveness in SOE-dominated cities

Journal:
Public Choice > Issue 1-2/2021
Authors:
Mathilde Maurel, Thomas Pernet
Important notes

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Abstract

This paper analyzes the efficiency of a set of environmental measures introduced by China’s 11th Five-Year Plan in 2006, using a rich and unique data set assembled from the Ministry of Environmental Protection and the State Environmental Protection Agency. By exploiting plausibly exogenous variation in regulatory stringency generated by the regulatory system across China’s provinces, we find evidence that pollution-intensive cities reduced their SO2 emissions substantially, whereas cities with a strong state-owned enterprise (SOE) presence did not. We interpret the results as pointing to evidence of Chinese SOEs’ ongoing soft budget constraints. The findings are robust to the inclusion of different fixed effects and other key determinants of pollution. Moreover, we investigate the main factors underlying regulatory non-compliance: the overlapping (or not) of “Two Control Zone” (Special Policy Zone, Coastal) cities wherein environmental (growth) policies are prioritized; the existence of turning points below (above) which growth and reductions in pollution substitute for (complement) each other; the size and extent of industrial concentration, which determines the possibilities of firms negotiating with the local authorities; and finally, the regulation-induced adoption of cleaner technologies by polluting firms, which enhance productivity and lower SO2 emissions.

Please log in to get access to this content

To get access to this content you need the following product:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 69.000 Bücher
  • über 500 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Umwelt
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Testen Sie jetzt 30 Tage kostenlos.

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 58.000 Bücher
  • über 300 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Testen Sie jetzt 30 Tage kostenlos.

Literature
About this article

Other articles of this Issue 1-2/2021

Public Choice 1-2/2021 Go to the issue

OriginalPaper

Marx after Kornai

Premium Partner

    Image Credits