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Does central supervision mitigate border pollution? Evidence from the national specially monitored firms program in China

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  • Wan, Panbing
  • Chen, Lin
  • Zhang, ZhongXiang

Abstract

This paper examines how central supervision influences border pollution, using China's National Specially Monitored Firms (NSMF) program as a quasi-experiment. We show that the program significantly reduces SO2 emission intensity among polluting firms near provincial borders relative to those farther away. The effect is concentrated in firms located downwind of urban areas. The mechanism operates through strengthened local enforcement, as the NSMF program compels stricter monitoring of border-proximate firms. In response, these firms adopt greater end-of-pipe abatement measures to comply with heightened regulatory pressure.

Suggested Citation

  • Wan, Panbing & Chen, Lin & Zhang, ZhongXiang, 2026. "Does central supervision mitigate border pollution? Evidence from the national specially monitored firms program in China," Journal of Environmental Economics and Management, Elsevier, vol. 136(C).
    • Handle: RePEc:eee:jeeman:v:136:y:2026:i:c:s0095069625001457
    DOI: 10.1016/j.jeem.2025.103261
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    Keywords

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    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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