IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v208y2023ics0921800923000587.html
   My bibliography  Save this article

Anti-corruption and corporate pollution mitigation: Evidence from China

Author

Listed:
  • Zhou, Zhifang
  • Han, Shangjie
  • Huang, Zhiying
  • Cheng, Xu

Abstract

Corruption is considered to be a major cause of increased pollution. However, little research has focused on the micro-environmental consequences of political initiatives aimed at curbing corruption, such as anti-corruption campaigns. Based on data from Chinese industrial enterprises, we investigate the impact of anti-corruption on corporate pollution mitigation. Our findings show that China's powerful anti-corruption campaign launched in 2013 has considerably reduced the pollution emission intensity of firms colluding with the government. The mechanism analysis suggests that the anti-corruption campaign has driven firms to mitigate pollution via the hardening effect of environmental regulation, the promotion effect of the market incentive function, and the optimization effect of corporate resource allocation. These findings provide important theoretical and practical value for environmental governance practices in nations like China.

Suggested Citation

  • Zhou, Zhifang & Han, Shangjie & Huang, Zhiying & Cheng, Xu, 2023. "Anti-corruption and corporate pollution mitigation: Evidence from China," Ecological Economics, Elsevier, vol. 208(C).
    • Handle: RePEc:eee:ecolec:v:208:y:2023:i:c:s0921800923000587
    DOI: 10.1016/j.ecolecon.2023.107795
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800923000587
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2023.107795?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Candau, Fabien & Dienesch, Elisa, 2017. "Pollution Haven and Corruption Paradise," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 171-192.
    2. Damian Clarke & Kathya Tapia-Schythe, 2021. "Implementing the panel event study," Stata Journal, StataCorp LP, vol. 21(4), pages 853-884, December.
    3. Xu, Gang & Yano, Go, 2017. "How does anti-corruption affect corporate innovation? Evidence from recent anti-corruption efforts in China," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 498-519.
    4. Filipe R. Campante & Davin Chor & Quoc‐Anh Do, 2009. "Instability And The Incentives For Corruption," Economics and Politics, Wiley Blackwell, vol. 21(1), pages 42-92, March.
    5. Wang, Shuhong & Zhao, Danqing & Chen, Hanxue, 2020. "Government corruption, resource misallocation, and ecological efficiency," Energy Economics, Elsevier, vol. 85(C).
    6. Kong, Dongmin & Zhu, Ling & Wang, Xin, 2022. "Anti-corruption and CEO compensation: Evidence from a natural experiment in China," Economic Modelling, Elsevier, vol. 106(C).
    7. David M. Konisky, 2007. "Regulatory Competition and Environmental Enforcement: Is There a Race to the Bottom?," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 853-872, October.
    8. Cole, Matthew A., 2007. "Corruption, income and the environment: An empirical analysis," Ecological Economics, Elsevier, vol. 62(3-4), pages 637-647, May.
    9. Kristel Buysse & Alain Verbeke, 2003. "Proactive environmental strategies: a stakeholder management perspective," Strategic Management Journal, Wiley Blackwell, vol. 24(5), pages 453-470, May.
    10. Biswas, Amit K. & Farzanegan, Mohammad Reza & Thum, Marcel, 2012. "Pollution, shadow economy and corruption: Theory and evidence," Ecological Economics, Elsevier, vol. 75(C), pages 114-125.
    11. Damian Clarke & Kathya Tapia-Schythe, 2021. "Implementing the panel event study," Stata Journal, StataCorp LP, vol. 21(4), pages 853-884, December.
    12. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    13. Wilson, John K. & Damania, Richard, 2005. "Corruption, political competition and environmental policy," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 516-535, May.
    14. Ghanem, Dalia & Zhang, Junjie, 2014. "‘Effortless Perfection:’ Do Chinese cities manipulate air pollution data?," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 203-225.
    15. Lanoie, Paul & Laplante, Benoit & Roy, Maite, 1998. "Can capital markets create incentives for pollution control?," Ecological Economics, Elsevier, vol. 26(1), pages 31-41, July.
    16. Christopher Marquis & Yanhua Bird, 2018. "The Paradox of Responsive Authoritarianism: How Civic Activism Spurs Environmental Penalties in China," Organization Science, INFORMS, vol. 29(5), pages 948-968, October.
    17. Hongbin Cai & Hanming Fang & Lixin Colin Xu, 2011. "Eat, Drink, Firms, Government: An Investigation of Corruption from the Entertainment and Travel Costs of Chinese Firms," Journal of Law and Economics, University of Chicago Press, vol. 54(1), pages 55-78.
    18. Zhou, Mengling & Wang, Bing & Chen, Zhongfei, 2020. "Has the anti-corruption campaign decreased air pollution in China?," Energy Economics, Elsevier, vol. 91(C).
    19. Damania, Richard & Fredriksson, Per G. & List, John A., 2003. "Trade liberalization, corruption, and environmental policy formation: theory and evidence," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 490-512, November.
    20. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    21. Mariassunta Giannetti & Guanmin Liao & Jiaxing You & Xiaoyun Yu, 2021. "The Externalities of Corruption: Evidence from Entrepreneurial Firms in China," Review of Finance, European Finance Association, vol. 25(3), pages 629-667.
    22. Fredriksson, Per G. & List, John A. & Millimet, Daniel L., 2003. "Bureaucratic corruption, environmental policy and inbound US FDI: theory and evidence," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1407-1430, August.
    23. repec:hal:spmain:info:hdl:2441/o45fqtltm960r11iq437ski90 is not listed on IDEAS
    24. Yang, Cheng & Zhang, Wenzhe & Sheng, Yan & Yang, Zhiqing, 2021. "Corruption and firm efforts on environmental protection: Evidence from a policy shock," Pacific-Basin Finance Journal, Elsevier, vol. 65(C).
    25. Ruixue Jia & Huihua Nie, 2017. "Decentralization, Collusion, and Coal Mine Deaths," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 105-118, March.
    26. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    27. Han Jiang & Nan Jia & Tao Bai & Garry D. Bruton, 2021. "Cleaning house before hosting new guests: A political path dependence model of political connection adaptation in the aftermath of anticorruption shocks," Strategic Management Journal, Wiley Blackwell, vol. 42(10), pages 1793-1821, October.
    28. Eric Yongchen Zou, 2021. "Unwatched Pollution: The Effect of Intermittent Monitoring on Air Quality," American Economic Review, American Economic Association, vol. 111(7), pages 2101-2126, July.
    29. Juan-Pablo Montero, 1999. "Voluntary Compliance with Market-Based Environmental Policy: Evidence from the U.S. Acid Rain Program," Journal of Political Economy, University of Chicago Press, vol. 107(5), pages 998-1033, October.
    30. Lu Zhang & Shenggang Ren & Xiaohong Chen & Dayuan Li & Duanjinyu Yin, 2020. "CEO Hubris and Firm Pollution: State and Market Contingencies in a Transitional Economy," Journal of Business Ethics, Springer, vol. 161(2), pages 459-478, January.
    31. Ruxi Wang & Frank Wijen & Pursey P.M.A.R. Heugens, 2018. "Government's green grip: Multifaceted state influence on corporate environmental actions in China," Strategic Management Journal, Wiley Blackwell, vol. 39(2), pages 403-428, February.
    32. Boying Li & Yu Hao & Chun-Ping Chang, 2018. "Does an anticorruption campaign deteriorate environmental quality? Evidence from China," Energy & Environment, , vol. 29(1), pages 67-94, February.
    33. Huanbi Yue & Chunyang He & Qingxu Huang & Dan Yin & Brett A. Bryan, 2020. "Stronger policy required to substantially reduce deaths from PM2.5 pollution in China," Nature Communications, Nature, vol. 11(1), pages 1-10, December.
    34. Li, Nian & Xu, Nianhang & Dong, Rui & Chan, Kam C. & Lin, Xiaowei, 2021. "Does an anti-corruption campaign increase analyst earnings forecast optimism?," Journal of Corporate Finance, Elsevier, vol. 68(C).
    35. Fredriksson, Per G. & Svensson, Jakob, 2003. "Political instability, corruption and policy formation: the case of environmental policy," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1383-1405, August.
    36. Liu, Zheng & Shen, Hongtao & Welker, Michael & Zhang, Ning & Zhao, Yang, 2021. "Gone with the wind: An externality of earnings pressure," Journal of Accounting and Economics, Elsevier, vol. 72(1).
    37. Wang, Chengqi & Kafouros, Mario & Yi, Jingtao & Hong, Junjie & Ganotakis, Panagiotis, 2020. "The role of government affiliation in explaining firm innovativeness and profitability in emerging countries: Evidence from China," Journal of World Business, Elsevier, vol. 55(3).
    38. Caroline Flammer, 2015. "Does product market competition foster corporate social responsibility? Evidence from trade liberalization," Strategic Management Journal, Wiley Blackwell, vol. 36(10), pages 1469-1485, October.
    39. Christopher Marquis & Cuili Qian, 2014. "Corporate Social Responsibility Reporting in China: Symbol or Substance?," Organization Science, INFORMS, vol. 25(1), pages 127-148, February.
    40. Cormier, Denis & Magnan, Michel & Morard, Bernard, 1993. "The impact of corporate pollution on market valuation: some empirical evidence," Ecological Economics, Elsevier, vol. 8(2), pages 135-155, October.
    41. Chengqi Wang & Junjie Hong & Mario Kafouros & Mike Wright, 2012. "Exploring the role of government involvement in outward FDI from emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(7), pages 655-676, September.
    42. Lopez, Ramon & Mitra, Siddhartha, 2000. "Corruption, Pollution, and the Kuznets Environment Curve," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 137-150, September.
    43. Ming Hua Li & Lin Cui & Jiangyong Lu, 2014. "Varieties in state capitalism: Outward FDI strategies of central and local state-owned enterprises from emerging economy countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(8), pages 980-1004, October.
    44. Arminen, Heli & Menegaki, Angeliki N., 2019. "Corruption, climate and the energy-environment-growth nexus," Energy Economics, Elsevier, vol. 80(C), pages 621-634.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boubaker, Sabri & Liu, Pei-Zhi & Ren, Yi-Shuai & Ma, Chao-Qun, 2024. "Do anti-corruption campaigns affect corporate environmental responsibility? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    2. Na Liu & Siyue Yang & Xinwei Gao & Ruirui Yang, 2024. "Policy Coordination Effects of APPCAP and ETS on Pollution and Carbon Reduction," Energies, MDPI, vol. 17(23), pages 1-22, November.
    3. Weiqi Hua & Chenglan Liu & Chunzhong Li, 2024. "Environmental Regulation, Government-Business Relations, and Corporate Green Innovation: Evidence from Low-Carbon City Pilot Policy," Sustainability, MDPI, vol. 16(22), pages 1-23, November.
    4. Feng, Qianbin & Hu, Xiao & Deng, Xinyi & Lu, Jun, 2023. "Anti-corruption campaign and capacity utilization of state-owned enterprises: Evidence from China’s central committee inspection," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 319-346.
    5. Zhuo, Chong & Luo, Kang & Song, Yaning & Dai, Ling & Liu, Yaobin, 2024. "Regional coordinated development and green transformation: Evidence from major national strategic zones," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1290-1307.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhou, Mengling & Wang, Bing & Chen, Zhongfei, 2020. "Has the anti-corruption campaign decreased air pollution in China?," Energy Economics, Elsevier, vol. 91(C).
    2. Haiqing Hu & Di Chen & Chun‐Ping Chang & Yin Chu, 2021. "The Political Economy Of Environmental Consequences: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 35(1), pages 250-306, February.
    3. Zhou, Kuo & Luo, Haotian & Ye, Diyu & Tao, Yunqing, 2022. "The power of anti-corruption in environmental innovation: Evidence from a quasi-natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    4. Boubaker, Sabri & Liu, Pei-Zhi & Ren, Yi-Shuai & Ma, Chao-Qun, 2024. "Do anti-corruption campaigns affect corporate environmental responsibility? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    5. Dincer, Oguzhan C. & Fredriksson, Per G., 2018. "Corruption and environmental regulatory policy in the United States: Does trust matter?," Resource and Energy Economics, Elsevier, vol. 54(C), pages 212-225.
    6. Pommeret, Aude & Yu, Xiaojun & Zhang, Lin, 2022. "Stringency of environmental policy in China: When pollution drives bribery," Economic Modelling, Elsevier, vol. 117(C).
    7. He, Wenjian & Chen, Xiaoyang & Liu, Zhiyong John, 2022. "Can anti-corruption help realize the “strong” Porter Hypothesis in China? Evidence from Chinese manufacturing enterprises," Journal of Asian Economics, Elsevier, vol. 80(C).
    8. Maurizio Lisciandra & Carlo Migliardo, 2017. "An Empirical Study of the Impact of Corruption on Environmental Performance: Evidence from Panel Data," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 297-318, October.
    9. Arminen, Heli & Menegaki, Angeliki N., 2019. "Corruption, climate and the energy-environment-growth nexus," Energy Economics, Elsevier, vol. 80(C), pages 621-634.
    10. Cordier, Mateo & Uehara, Takuro & Baztan, Juan & Jorgensen, Bethany & Yan, Huijie, 2021. "Plastic pollution and economic growth: The influence of corruption and lack of education," Ecological Economics, Elsevier, vol. 182(C).
    11. Per G. Fredriksson & Eric Neumayer, 2016. "Corruption and Climate Change Policies: Do the Bad Old Days Matter?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 451-469, February.
    12. Panteli Maria & Delipalla Sofia, 2022. "The Impact of Institutions on Economic and Environmental Performance: Evidence From Europe," South East European Journal of Economics and Business, Sciendo, vol. 17(2), pages 125-141, December.
    13. Bin Dong & Benno Torgler, 2010. "The Consequences of Corruption: Evidence from China," Working Papers 2010.73, Fondazione Eni Enrico Mattei.
    14. Román-Aso, Juan A. & Bellido, Héctor & Olmos, Lorena, 2024. "Does corruption pollute the wheel? An analysis for OECD countries," Ecological Economics, Elsevier, vol. 223(C).
    15. Ren, Yi-Shuai & Ma, Chao-Qun & Apergis, Nicholas & Sharp, Basil, 2021. "Responses of carbon emissions to corruption across Chinese provinces," Energy Economics, Elsevier, vol. 98(C).
    16. Wu, Jiamei & Chen, Zhibin & Guo, Chong, 2022. "How does anti-corruption affect green innovation? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 405-424.
    17. Hamaguchi, Yoshihiro, 2023. "Environmental tax evasion as a determinant of the Porter and pollution haven hypotheses in a corrupt political system," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 610-633.
    18. Bin Dong & Benno Torgler, 2010. "The Consequences of Corruption: Evidence from China," Working Papers 2010.73, Fondazione Eni Enrico Mattei.
    19. Alexandra-Anca Purcel, 2019. "Does Political Stability Hinder Pollution? Evidence From Developing States," Economic Research Guardian, Mutascu Publishing, vol. 9(2), pages 75-98, December.
    20. Halkos, George E. & Tzeremes, Nickolaos G., 2014. "Public sector transparency and countries’ environmental performance: A nonparametric analysis," Resource and Energy Economics, Elsevier, vol. 38(C), pages 19-37.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:208:y:2023:i:c:s0921800923000587. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.