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Environmentally-Inclined Politicians and Local Environmental Performance: Evidence from Publicly Listed Firms in China

Author

Listed:
  • Hanming Fang
  • Honglin Ren
  • Danwen Song
  • Nianhang Xu

Abstract

We study how environmentally-inclined politicians (EIPs), i.e., politicians with prior environment-related working experience, affect local environmental performance in China. Firms located in cities with EIPs have lower levels of sulfur dioxide (SO2) emissions. The effect is attenuated when the politician is in his/her second term and among firms that are economically important. Firms in cities with EIPs commit less environmental violations, receive more green subsidies from the local government, and choose to establish new polluting subsidiaries in cities without EIPs. Furthermore, these EIPs do not have inferior economic performance and their promotion likelihood is negatively related to local emission levels. The findings overall suggest that local officials strategically leverage their expertise in environment protection to allocate more effort on environmental causes.

Suggested Citation

  • Hanming Fang & Honglin Ren & Danwen Song & Nianhang Xu, 2023. "Environmentally-Inclined Politicians and Local Environmental Performance: Evidence from Publicly Listed Firms in China," NBER Working Papers 31071, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31071
    Note: CF EEE PE
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    Cited by:

    1. Xie, Rui & Zhang, Jiahuan & Tang, Chuan, 2023. "Political connection and water pollution: New evidence from Chinese listed firms," Resource and Energy Economics, Elsevier, vol. 74(C).

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • 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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