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Environmental Centralizing and Firm Productivity: Evidence from China’s Vertical Environmental Reforms

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  • Chao Han
  • Xiaolin Sun
  • Xian-Liang Tian

Abstract

This article investigates the impact of vertical environmental reforms-a series of environmental centralizing reforms in China on total factor productivity (TFP) of Chinese manufacturing firms during 1998–2007, using manually collected data on the reforms. After the reforms, firms’ TFP in polluting industries of the reformed districts/counties in a city decreased by 4.4%; however, the impact on state-owned enterprises is not significant. Mechanism analysis shows that the proportion of polluting industries in the economy and pollutant emissions decreased after the reforms, implying increased stringency of environmental regulation, while firm innovation has not significantly been affected.

Suggested Citation

  • Chao Han & Xiaolin Sun & Xian-Liang Tian, 2021. "Environmental Centralizing and Firm Productivity: Evidence from China’s Vertical Environmental Reforms," Land Economics, University of Wisconsin Press, vol. 97(4), pages 723-744.
    • Handle: RePEc:uwp:landec:v:97:y:2021:i:4:p:723-744
    Note: DOI: 10.3368/le.97.4.120219-0171R
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    File URL: http://le.uwpress.org/cgi/reprint/97/4/723
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    Cited by:

    1. Han, Chao & Tian, Xian-Liang, 2022. "Less pollution under a more centralized environmental system: Evidence from vertical environmental reforms in China," Energy Economics, Elsevier, vol. 112(C).

    More about this item

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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