Environmental regulations and industrial competitiveness: evidence from China

Economic activities are closely related to real-world environmental issues. Currently, more attention is paid to the association between environmental regulations and industrial competitiveness (IC) because of pressures on economic development and environmental protection. In this study, we identify and explain the association between environmental regulations and IC in China. As the largest developing country in the world, China has the unavoidable responsibility of protecting the environment and promoting global economic development. We analyse the mechanisms behind environmental regulations and industrial competiveness at the provincial level and conclude that the impact of environmental regulations upon IC is not a simple linear one, but a U-shaped relationship. It is argued that the crucial intervention to activate the U-shaped relationship, or Porter’s Hypothesis, is innovation, which can be triggered by stringent regulations and well-designed policies

The Impact of Energy Saving Policies on Industries in China

Current design and implementation of China's energy saving policies are characterized by multiple, mixed policy instruments and spatially based regulatory disparity. The dissertation replies on interviews, firm-level data, and industry-aggregate data to examine the impact of energy saving policy on firm-level energy saving and industry location in China. Case study research, using interviews with 20 firms in four industries and four locations, is applied to explain firm energy saving behaviors. The case studies show that competitiveness and legitimation are major motivations for energy saving under the policy influence of energy-saving agreements and capacity control and elimination. Extending from the case study findings, the dissertation examines on the basis of data of firms involved in the Top-1000 enterprise energy saving program the factors that contribute to energy efficiency improvements. Empirical results show that firms with less expansion and no new products are more likely to fulfill greater reduction of energy intensity for both existing and new production capacities. Their energy savings are driven by the pressure of lower individual and industry profit, higher electricity price and more subsidies, but are not correlated with any behavioral features identified in the previous literature. Spatially based regulatory disparity may direct industry growth to regions with lower regulation. Analysis of industry aggregate data from 2005 to 2010 confirms policy-induced industry location, and indicates that an 11% employment loss in manufacturing industries is associated with higher energy-saving regulation. The results suggest the need of future policy assistance for energy saving and resource conservation in regions with laxer regulations, and for the reallocation of labor and production. The dissertation complements the literature on the explanations for the energy efficiency gap, implications of policy instruments on firm behavior, and locational impact of environmental regulation. It suggests the effectiveness of combined mandatory, voluntary, and information policies designed to motivate firms and eliminate behavioral barriers, the usefulness of incorporating market-based policy in Chinese energy saving policies to encourage energy efficiency and mitigate relocation, and the need for further research into the cost effectiveness of financial incentives to meet efficiency targets for industries

Dynamic changes and convergence of China’s regional green productivity:A dynamic spatial econometric analysis

Low-carbon economic development is at the heart of the post-pandemic green recovery scheme worldwide. It requires economic recovery without compromising on the environment, implying a critical role that green productivity plays in achieving the carbon neutrality goal. Green productivity measures the quality of economic growth with consideration for energy consumption and environmental pollution. This study employs the slacks-based measure directional distance function (SBM-DDF) approach and the Malmquist-Luenberger (ML) index to calculate green productivity and its components of 30 provinces in China between 2001 and 2018. Using a spatial panel data model, we empirically analyzed the conditional β-convergence of China's green productivity. We found that overall, since 2001, China's green productivity has demonstrated a continuous upward trend. When taking into account spatial factors, China's green productivity demonstrates a significant conditional β-convergence. In terms of regional effects, the results indicate that the green productivity of the eastern and western regions demonstrates club convergence, implying a more balanced green economic development. Moreover, the convergence rate of China's green productivity increases with the addition of environmental regulation variable, and so the corresponding convergence time decreases. It indicates that environmental regulations help to facilitate the convergence of China's green productivity, narrowing the gap between the regional green economic development. The findings provide guideline for achieving a low-carbon development and carbon neutrality from a regional green productivity perspective

Government institutions and the dynamics of urban growth in China

Economic growth in China in recent decades has largely rested on the dynamism of its cities. High economic growth has coincided with measures aimed at improving the efficiency of local governments and with a mounting political drive to curb corruption. Yet the connection between government institutions and urban growth in China remains poorly understood. This paper is the first to look into the link between government efficiency and corruption, on the one hand, and urban growth in China, on the other hand and to assess what is the role of institutions relative to more traditional factors for economic growth in Chinese cities. Using panel data for 283 cities over the period between 2003 and 2014, the results show that the urban growth in China is a consequence of a combination of favorable human capital, innovation, density, local conditions, foreign direct investment, and city-level government institutions. Both government quality—especially for those cities with the best governments—and the fight against corruption at the city level have a direct effect on urban growth. Measures to tackle corruption at the provincial level matter in a more indirect way, by raising or lowering the returns of other growth-inducing factors

Energy efficiency in the Chinese provinces:a fixed effects stochastic frontier spatial Durbin error panel analysis

Energy efficiency improvement has been a key objective of China's long- term energy policy. In this paper, we derive single-factor technical energy efficiency (abbreviated as energy efficiency) in China from multi-factor efficiency estimated by means of a translog production function and a stochastic frontier model on the basis of panel data on 29 Chinese provinces over the period 2003-2011. We find that average energy efficiency has been increasing over the research period and that the provinces with the highest energy efficiency are at the east coast and the ones with the lowest in the west, with an intermediate corridor in between. In the analysis of the determinants of energy efficiency by means of a spatial Durbin error model both factors in the own province and in first-order neighboring provinces are considered. Per capita income in the own province has a positive effect. Furthermore, foreign direct investment and population density in the own province and in neighboring provinces have positive effects, whereas the share of state-owned enterprises in Gross Provincial Product in the own province and in neighboring provinces has negative effects. From the analysis it follows that inflow of foreign direct investment and reform of state-owned enterprises are important policy handles

Environmental Regulation and Green Productivity of the Construction Industry in China

There are few studies analyzing whether different types of environmental regulation have differential impacts on the efficiency of the construction industry. Using 2012-2016 panel data from 30 provinces in China, the green total factor productivity (GTFP) of the construction industry is measured with a global Malmquist Luenberger productivity index based on the epsilon measure (EBM-GML) model. Thereafter, a panel Tobit regression model is proposed to explore the relationship between three types of environmental regulation and the GTFP of the construction industry. The results show that: (1) from 2012 to 2016, the GTFP of the Chinese construction industry grew slowly at an average annual rate of 0.14%; (2) both one-phase lagged command-and-control and current phase market-based environmental regulation had a positive linear relationship with GTFP. One-phase lagged voluntary environmental regulation on the other hand, had an inverted U-shaped relationship with GTFP; (3) the three types of environmental regulation can be combined to establish a suitable environmental regulation system. The findings of this study provide guidance for the sustainable development of the construction industry by combining the actions of different types of environmental regulation