Environmental Regulations and Industrial Performance Evidence from the Revision of Water Pollution Prevention and Control Law in China

Wei Yu


School of Economics & Management, Tongji University, Shanghai 200092 (China)

Qiang Chen


School of Economics & Management, Tongji University, Shanghai 200092 (China)


Abstract

Stringent environmental regulations are urgently needed as China’s environmental pollution is increasingly become an important issue both domestically and internationally. Based on a natural experiment of water pollution prevention and Control Law’s revision in 2008(WPPCL2008), this study investigates the effects of environmental regulatory policy on industry in China by using the industrial sectors’ data from 2003-2011. The results show that the WPPCL2008 significantly increases the total labor productivity, but has no ROA-inducement effect for water pollution-intensive sectors. Furthermore, WPPCL2008 has an insignificant negative influence on employment level of the water pollution-intensive sectors. At the same time, this study provides evidence on the effectiveness of the current written environmental laws in China.


Keywords:

environmental regulations, water pollution prevention and control law, industrial performance, a differences-in-differences approach

ALLEN F., QIAN J., QIAN M., 2005, Law, finance, and economic growth in China, in: Journal of Financial Economics 77, p. 57-116.
  Google Scholar

ALLERS M.A., HOEBEN C., 2010, Effects of unit-based garbage pricing: a differences-in-differences approach, in: Environmental and Resource Economics 45, p. 405-428.
  Google Scholar

ALPAY E., BUCCOLA S., KERKVLIET J., 2002, Productivity growth and environmental regulation in Mexican and U.S. food manufacturing, in: American Journal of Agricultural Economics 84(4), p. 887-901.
  Google Scholar

BARBERA A.J., MCCONNEL V.D., 1990, The impact of environmental regulations on industry productivity, in: Journal of Environmental Economics and Management 18, p. 50-65.
  Google Scholar

BERMAN E., BUI L. T. M., 2001, Environmental regulation and productivity: Evidence from oil refineries, in: Review of Economics and Statistics 83(3), p. 498-510.
  Google Scholar

BEYER S., 2006, Environmental law and policy in the People's Republic of China, in: Chinese Journal of International Law 5, P. 185-211.
  Google Scholar

BLOOM M., MILKOVICH G., 1998, Relationships among risk, incentive pay, and organizational performance, in: Academy of Management Journal 41(3), P. 283-297.
  Google Scholar

BODEN T., ANDRES J., MARLAND G., Global, Regional, and National Fossil-Fuel CO2 Emissions, CDIACenter, Oak Ridge, 2013.
  Google Scholar

BRUNNERMEIER S. B., COHEN M. A., 2003, Determinants of environmental innovation in US manufacturing industries, in: Journal of Environmental Economics and Management 45, p. 278-293.
  Google Scholar

CLIFT R., WRIGHT L., 2000, Relationships between environmental impacts and added value along the supply chain, in: Technological Forecasting & Social Change 65, p. 281-295.
  Google Scholar

COLE M., ELLIOTT R., 2005, FDI and the capital intensity of dirty sectors, in: Review of Development Economics 9(4), p. 530-548.
  Google Scholar

FINKELSTEIN S., BOYD B. K., 1998, How much does the CEO matter? The role of managerial discretion in the setting of CEO compensation, in: Academy of Management Journal 41(2), p. 179-199.
  Google Scholar

GOLLOP F. M., ROBERTS M. J., 1983, Environmental regulations and productivity growth: The case of fossil-fuelled electric power generation, in: Journal of Political Economy 91(4), p. 654-74.
  Google Scholar

GRAY W. B., SHADBEGIAN R. J., 2003, Plant vintage, technology, and environmental
  Google Scholar

regulation, in: Journal of Environmental Economics and Management 46(3), p. 384-40.
  Google Scholar

HAMAMOTO M., 2006, Environmental regulation and the productivity of Japanese manufacturing industries, in: Resource and Energy Economics. 28, p. 299-312.
  Google Scholar

JAFFE A. B., PERTERSON S. R., PORTNEY P. R., STAVINS R. N., 1995, Environmental regulation and international competitiveness: What does the evidence tell us? in: Journal of Economic Literature 93, p. 132-63.
  Google Scholar

JENKINS R., Environmental Regulation and International Competitiveness: A Review of Literature and Some European Evidence, UN University Institute for New Technologies 1998.
  Google Scholar

LANOIE P., PATRY M., LAJEUNESSE R., 2008, Environmental regulation and productivity: new findings on the Porter hypothesis, in: Journal of Productivity Analysis 30(2), p. 121-128.
  Google Scholar

LUKEN R., 1997, The effect of environmental regulation on industrial competitiveness of selected industries in developing countries, in: Greener Management International 19, p. 67-78.
  Google Scholar

KELLER W., LEVINSON A., 2002, Pollution abatement costs and foreign direct investment inflows to US states, in: Review of Economics and Statistics 84 (4), P. 691-703.
  Google Scholar

MA Z., XUE B., GENG Y., REN W., FUJITA T., ZHANG Z., DE OLIVEIRA J. P., JACQUES D. A., XI F., 2013, Co-benefits analysis on climate change and environmental effects of wind-power: A case study from Xinjiang, China. In: Renewable Energy 57, p. 35-42.
  Google Scholar

MANAGI S., OPALUCH J., JIN D., GRIGALUNAS T., 2005, Environmental regulations and technological change in the offshore oil and gas industry, in: Land Economics 81, p. 303-319.
  Google Scholar

MEP., 2014, 2013, Report on the State of the Environment in China, http://news.xinhuanet.com/live/2014-06/04/c_1110980565.htm.
  Google Scholar

PORTER M., VAN DER LINDE C., 1995, Toward a new conception of the environment- competitiveness relationship, in: Journal of Economic Perspective 9(4), P. 97-118.
  Google Scholar

STOKOE S., GASNE S., China's Environmental Law Framework. Pacific Business Press 2008.
  Google Scholar

TENG M. J., WU S. Y., CH S. J. H., 2014, Environmental commitment and economic performance, in: Environmental Policy and Governance 24, p. 16-27.
  Google Scholar

TOSI H L., WERNER S., KATZ J. P., GOMEZ-MEJIA L. R., 2000, How much does performance matter?, in: Journal of Management 26(2), p. 301-339.
  Google Scholar

WANG H., JIN Y., 2007, Industrial ownership and environmental performance: evidence from China, in: Environmental and Resources Economics 36(3), p. 255-273.
  Google Scholar

WINALSKI D., 2009, Cleaner water in China? The implications of amendments to China's law on the prevention and control of water pollution, in: Journal of Environmental Law& Litigation 24, p. 181-202.
  Google Scholar

XINHUANET, http://news.xinhuanet.com/
  Google Scholar

YANG C. H., TSENG Y. H., CHEN C. P., 2012, Environmental regulations, induced R&D, and productivity: evidence from Taiwan’s manufacturing industries, in: Resource and Energy Economics 34(4), p. 514-532.
  Google Scholar

Download


Published
2015-01-05

Cited by

Yu, W., & Chen, Q. (2015). Environmental Regulations and Industrial Performance Evidence from the Revision of Water Pollution Prevention and Control Law in China. Problemy Ekorozwoju, 10(1), 41–48. Retrieved from https://ph.pollub.pl/index.php/preko/article/view/4925

Authors

Wei Yu 

School of Economics & Management, Tongji University, Shanghai 200092 China

Authors

Qiang Chen 

School of Economics & Management, Tongji University, Shanghai 200092 China

Statistics

Abstract views: 9
PDF downloads: 4