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Will tougher environmental policy reduce the employment of industrial enterprises? The heterogeneity analysis based on enterprise level and city level

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  • Yusen Gao
  • Changsheng Hu
  • Yue Yang

Abstract

Using the Two Control Zones policy in China, we analyze the impact of tougher environmental policy on the employment of industrial enterprises through DID and PSM‐DID methods. We find that tougher environmental policy has a positive (negative) employment effect for industrial enterprises above (below) designated size. In the heterogeneity tests, the positive effect is more significant for enterprises with bigger size, stronger R&D capability, less financial constraint, owned by foreign shareholders, and located in eastern provinces. As for the enterprises in heavily polluting industries, tougher environmental regulation may hinder their development.

Suggested Citation

  • Yusen Gao & Changsheng Hu & Yue Yang, 2022. "Will tougher environmental policy reduce the employment of industrial enterprises? The heterogeneity analysis based on enterprise level and city level," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1810-1834, September.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:6:p:1810-1834
    DOI: 10.1002/mde.3490
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    Cited by:

    1. Chun Lin & Gengrui Cui & Yingjie Sun, 2023. "Labor allocation: How environmental regulation promotes industrial structure," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 1995-2003, June.

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