The impacts of political hierarchy on corporate pollution emissions: Evidence from a spatial discontinuity in China.

Exploiting Chongqing's promotion to a province-level municipality, this paper investigates the causal effect of political hierarchy on corporate SO2 emissions using a spatial regression discontinuity (RD) design. In 1997, the prefecture-level Chongqing was promoted to a province-level municipality, obtaining a substantial increase in decision-making power over fiscal, personnel and administrative affairs. Given the fact that the areas around the Chongqing-Sichuan border shared the same social, economic, and geographical conditions prior to the treatment, the novel findings show that political hierarchy negatively affects corporate SO2 emissions and Chongqing's enterprises adjacent to the border have a 26% (1-e-0.301) reduction of SO2 emissions comparatively. The effects are robust enough using alternative model specifications and bandwidths. Besides, this paper provides empirical evidence that enterprises of Chongqing have resource-receiving and external-financing advantages owing to its higher political status. These interwoven advantages help enterprises in Chongqing exhibit better financial performance and enable them to conduct energy substitution, improve energy efficiency and adopt more end-of-pipe treatment, thereby mitigating SO2 emissions. Based on these findings, this study provides policy implications by shedding light on the effects of political hierarchy on corporate pollution emissions.

The mechanism and effects of national smart city pilots in China on environmental pollution: empirical evidence based on a DID model.

The policy of the national smart city (NSC) pilots, a new type of urbanization for future development, has been implemented in China in batches. This paper investigates the mechanism and effects of the NSC pilots on the environment. Using the prefecture-level panel data during 2004-2018 period, our multi-period difference-in-differences (DID) estimation shows that the NSC pilots causally mitigate SO2 (wastewater) pollution by 13.76% (14.36%), which is supported by a series of robustness tests. The mediating effect model indicates that green total factor productivity (GTFP) plays a partial mediating role in mitigating both SO2 and wastewater emissions, while technological innovation plays a partial mediating role in mitigating wastewater emissions. After introducing the two mediating channels into the multi-period DID model, the reduction effect for SO2 and wastewater emissions drops to 11.04% (1-e- 0.117) and 12.1% (1-e- 0.129), respectively. Comparatively, the NSC pilots contribute to the improvement of GTFP and GTFP takes the major mediating role in reducing SO2 and wastewater pollution. The heterogeneous effects of the NSC pilots show that the mitigation effect is more pronounced in cities with strong fiscal support, cities with abundant human capital, and cities with high R&D expenditure. Based on these novel findings, this study provides some policy implications for achieving better mitigation effects.