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Environmental regulation, emissions and productivity: Evidence from Chinese COD-emitting manufacturers

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  • Wang, Chunhua
  • Wu, JunJie
  • Zhang, Bing

Abstract

In recent years, China's environmental regulation efforts have mainly focused on severely polluted “key regions.” The central government has designated the “three rivers and three lakes basins” (3Rs3Ls) as key regions for water pollution control and has imposed a variety of regulations to improve water quality in those basins. This paper evaluates the effects of the water quality regulations on firms' emissions of chemical oxygen demand (COD) and productivity in the 3Rs3Ls basins. We find that although the water quality regulations forced many small, heavily-polluting firms to shut down, they had no statistically significant effects on surviving firms' productivity because they were ineffective in reducing their COD emissions. A policy that forces the surviving firms to reduce their emissions would reduce their output values and productivity, at least in the short run. However, the effect is likely to be small. Specifically, a 10% reduction in total COD emissions from the industrial sectors would require only a 0.1% reduction in output values under the current production technologies. These findings are robust to alternative specifications and sampling strategies.

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  • Wang, Chunhua & Wu, JunJie & Zhang, Bing, 2018. "Environmental regulation, emissions and productivity: Evidence from Chinese COD-emitting manufacturers," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 54-73.
  • Handle: RePEc:eee:jeeman:v:92:y:2018:i:c:p:54-73
    DOI: 10.1016/j.jeem.2018.08.004
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    Cited by:

    1. Ying She & Yaobin Liu & Yangu Deng & Lei Jiang, 2020. "Can China’s Government-Oriented Environmental Regulation Reduce Water Pollution? Evidence from Water Pollution Intensive Firms," Sustainability, MDPI, Open Access Journal, vol. 12(19), pages 1-19, September.
    2. Zhang, Yan & Cui, Jingbo & Lu, Chenghao, 2020. "Does environmental regulation affect firm exports? Evidence from wastewater discharge standard in China," China Economic Review, Elsevier, vol. 61(C).
    3. Yi Li & Lili Ding & Yongliang Yang, 2020. "Can the Introduction of an Environmental Target Assessment Policy Improve the TFP of Textile Enterprises? A Quasi-Natural Experiment Based on the Huai River Basin in China," Sustainability, MDPI, Open Access Journal, vol. 12(4), pages 1-19, February.
    4. Chunhua Wang & Changdong Zhang & Yong Wang, 0. "Environmental satisfaction among residents in Chinese cities," Empirical Economics, Springer, vol. 0, pages 1-19.
    5. Li, Lei & Löschel, Andreas & Pei, Jiansuo & Sturm, Bodo & Yu, Anqi, 2020. "Trade liberalization and SO2 emissions: Firm-level evidence from China's WTO entry," CAWM Discussion Papers 119, University of Münster, Center of Applied Economic Research Münster (CAWM).
    6. Ponce, Pablo & Alvarado, Rafael & Ponce, Katerine & Alvarado, Raquel & Granda, Danny & Yaguana, Karen, 2019. "Green returns of labor income and human capital: Empirical evidence of the environmental behavior of households in developing countries," Ecological Economics, Elsevier, vol. 160(C), pages 105-113.
    7. Liwei Tang & Ke Li & Pinrong Jia, 2020. "Impact of Environmental Regulations on Environmental Quality and Public Health in China: Empirical Analysis with Panel Data Approach," Sustainability, MDPI, Open Access Journal, vol. 12(2), pages 1-15, January.
    8. Yuping Deng & Yanrui Wu & Helian Xu, 2019. "Environmental Regulation and Export Product Quality: Evidence from Chinese Firms," Economics Discussion / Working Papers 19-14, The University of Western Australia, Department of Economics.
    9. Pingping Wang & Wendong Zhang & Minghao Li & Yijun Han, 2019. "Does Fertilizer Education Program Increase the Technical Efficiency of Chemical Fertilizer Use? Evidence from Wheat Production in China," Sustainability, MDPI, Open Access Journal, vol. 11(2), pages 1-14, January.

    More about this item

    Keywords

    Environmental regulation; Emissions; Productivity; Chemical oxygen demand; Manufacturing; China;

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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