Strategic Interactions in Environmental Regulation Enforcement: Evidence fromChinese Provinces
AbstractThis paper studies whether Chinese provinces set strategically their environmental stringency when faced with interprovincial competition for mobile capital. Using Chinese provincial data and spatial panel econometric models, we find that Chinese provinces do engage in this kind of strategic interaction, particularly among those with similar industrial structure. Furthermore, we haven’t found evidence of asymmetric responsiveness suggested by the race to the bottom theory. Finally, the one-sided fiscal decentralization is likely to strengthen the strategic behavior. These empirical results call for a skeptical attitude towards China’s decentralization of environment policy implementation as well as its fiscal arrangements.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 201207.
Date of creation: 2012
Date of revision:
China; strategic interaction; pollution; spatial panel;
Find related papers by JEL classification:
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-27 (All new papers)
- NEP-ENV-2012-02-27 (Environmental Economics)
- NEP-RES-2012-02-27 (Resource Economics)
- NEP-TRA-2012-02-27 (Transition Economics)
- NEP-URE-2012-02-27 (Urban & Real Estate Economics)
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