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Is the environment a victim of the economic downturn? Evidence from China's manufacturing firms

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  • Zhang, Xuemei
  • Yin, Haitao
  • Yang, Huimin

Abstract

This paper investigates whether pollution-intensive industries develop faster in a time of economic downturn. Using firm-level panel data from 2005 to 2013, we find supporting empirical results in an analysis of China's manufacturing industries in the 2008 economic crisis. We find that pollution-intensive firms tended to produce more compared with non-pollution-intensive firms in the 2008 economic crisis, with the pre-crisis period as a baseline. We further find that this effect is more pronounced in areas with higher export dependence and a smaller proportion of production from pollution-intensive industries. The relatively faster production expansion in pollution-intensive industries is more evident for state-owned enterprises.

Suggested Citation

  • Zhang, Xuemei & Yin, Haitao & Yang, Huimin, 2023. "Is the environment a victim of the economic downturn? Evidence from China's manufacturing firms," Environment and Development Economics, Cambridge University Press, vol. 28(2), pages 191-209, April.
    • Handle: RePEc:cup:endeec:v:28:y:2023:i:2:p:191-209_5
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