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The determinants of pollution levels: Firm-level evidence from Chinese manufacturing

Author

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  • Jiang, Liangliang
  • Lin, Chen
  • Lin, Ping

Abstract

Using a large, unique, firm-level dataset from the Chinese manufacturing sector, we study important factors that are related to emission intensity for three pollutants in China – sulfur dioxide, wastewater, and soot. Our main findings are as follows: (1) compared to state-owned enterprises (SOEs), both foreign-owned firms and domestic public-listed firms exhibit less intensive pollutant emissions; (2) firms in regions with less local protection have lower pollution intensity; (3) better property rights protection is negatively correlated with pollutant discharge over and beyond the national standards; and (4) larger firms, firms in industries that export more, and firms with more educated employees pollute less. These results suggest that China should not target foreign firms more harshly in its effort to reduce industrial pollution. Better institutions in the form of more effective law enforcement and lower entry barriers across regional markets are also means of curbing China’s pressing environmental problems during its current stage of economic development.

Suggested Citation

  • Jiang, Liangliang & Lin, Chen & Lin, Ping, 2014. "The determinants of pollution levels: Firm-level evidence from Chinese manufacturing," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 118-142.
    • Handle: RePEc:eee:jcecon:v:42:y:2014:i:1:p:118-142
    DOI: 10.1016/j.jce.2013.07.007
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    More about this item

    Keywords

    Pollution; Local protection; Law enforcement; FDI;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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