IDEAS home Printed from https://ideas.repec.org/p/mse/cesdoc/20002.html

New Evidence on the Soft Budget Constraint: Chinese Envronmental Policy Effectiveness in Private versus SOEs

Author

Listed:
  • Mathilde Maurel

    (CNRS - Centre d'Economie de la Sorbonne - Université Paris 1 panthéon-Sorbonne
    https://centredeconomiesorbonne.cnrs.fr)

  • Thomas Pernet

    (Centre d'Economie de la Sorbonne
    https://centredeconomiesorbonne.cnrs.fr)

Abstract

This paper analyses the efficiency of a set of environmental measures introduced by the 11th FYP (Five Years Plan) in China 2006, using a rich and unique dataset borrowed from the Ministry of Environmental Protection (MEP) and from the State Environmental Protection Agency (SEPA). The objective is to provide new evidence of the Soft Budget Constraint (SBC), which is a key concept coinced by Janos Kornai. The main finding is that TCZ (Two Control Zone) cities are successful in bringing down the emission of SO2, and more importantly that this success is driven by the private sector. Sectors dominated by State-Owned Enterprises (SOEs) are less sensitive to the environmental target-based evaluation system, by a factor of 42%. We also find that one channel, through which this adjustment takes place, is Total Factor Productivity (TFP), but not in the case of SOEs. We interpret these results as pointing to the evidence of a still ongoing SBC surrounding Chinese SOEs

Suggested Citation

  • Mathilde Maurel & Thomas Pernet, 2020. "New Evidence on the Soft Budget Constraint: Chinese Envronmental Policy Effectiveness in Private versus SOEs," Documents de travail du Centre d'Economie de la Sorbonne 20002, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:20002
    DOI: 10.1007%2Fs11127-020-00834-1
    as

    Download full text from publisher

    File URL: http://mse.univ-paris1.fr/pub/mse/CES2020/20002.pdf
    Download Restriction: no
    File URL: https://halshs.archives-ouvertes.fr/halshs-02469382
    Download Restriction: no
    File URL: https://doi.org/10.1007%2Fs11127-020-00834-1
    Download Restriction: no
    File URL: https://libkey.io/10.1007%2Fs11127-020-00834-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mehrdad Vahabi, 2025. "Introduction: A Special Issue in Honouring Janos Kornai," Palgrave Studies in the History of Economic Thought, in: The Legacy of Janos Kornai, chapter 0, pages 31-48, Palgrave Macmillan.
    2. Mehrdad Vahabi, 2025. "In Janos Kornai’s Memory," Palgrave Studies in the History of Economic Thought, in: The Legacy of Janos Kornai, chapter 0, pages 21-30, Palgrave Macmillan.
    3. Lu, Yunguo & Zhang, Lin, 2022. "National mitigation policy and the competitiveness of Chinese firms," Energy Economics, Elsevier, vol. 109(C).
    4. Aleksander Grad & Jakub Karnowski & Andrzej Rzońca, 2022. "Jak powiązać prywatyzację i rozwój filara kapitałowego w systemie emerytalnym – propozycja," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 4, pages 484-508.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • 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
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mse:cesdoc:20002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lucie Label (email available below). General contact details of provider: https://edirc.repec.org/data/cenp1fr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.