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The impact of environmental governance policies on enterprises emissions

Author

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  • Wei, Jia
  • Chen, Jiahe
  • Zhang, Sijun
  • Yin, Hua-Tang
  • Zhang, Xin

Abstract

Focusing on the Yangtze River Delta region, this paper examines the actual effectiveness of regional collaborative environmental governance (RCEG) on corporate emission reduction at the micro level using the difference-in-differences method based on panel data of Chinese A-share listed companies from 2009 to 2022. RCEG enhances policy effectiveness by establishing uniform regulatory standards, addressing blind spots and gaps in environmental governance, and promoting resource sharing and collaborative oversight. But at the same time, it led to the relocation of highly polluting companies outside the governance region, causing a broader pollution spillover effect. This paper further analyzes the heterogeneity of this negative effect under different characteristics of regions and enterprises, and finds that the sharp increase of innovation and financing costs and the reduction of enterprise subsidies caused by the weakening of local governments' free-rider mentality under the unified command of action are intrinsic factors explaining this dilemma. This paper provides theoretical foundations and practical guidance for improving regional collaborative governance policies.

Suggested Citation

  • Wei, Jia & Chen, Jiahe & Zhang, Sijun & Yin, Hua-Tang & Zhang, Xin, 2025. "The impact of environmental governance policies on enterprises emissions," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 424-445.
    • Handle: RePEc:eee:ecanpo:v:87:y:2025:i:c:p:424-445
    DOI: 10.1016/j.eap.2025.06.010
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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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