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Environmental regulation and energy efficiency: evidence from daily penalty policy in China

Author

Listed:
  • Kai Hu

    (East China University of Science and Technology
    University of St Andrews)

  • Dandan Li

    (Hubei University of Economics
    Hubei University of Economics)

  • Daqian Shi

    (Wuhan University of Technology)

  • Wenli Xu

    (Anhui University School of Economics)

Abstract

To achieve the twin aims of environmental improvement and economic progress, some cities in China have implemented a stringent environmental regulation, Daily Penalty Policy (DPP). Compared with previous environmental regulations, DPP dramatically increases the cost of environmental pollution, but it is unclear whether DPP can effectively control environmental pollution and improve economic development together. This study evaluates the environmental and economic effects of DPP by estimating the relationship between DPP and energy efficiency in time-varying difference-in-differences (Time-varying DID) models. Our results show that DPP increases the firm-level energy efficiency ( $$\beta $$ β =0.07, p

Suggested Citation

  • Kai Hu & Dandan Li & Daqian Shi & Wenli Xu, 2023. "Environmental regulation and energy efficiency: evidence from daily penalty policy in China," Journal of Regulatory Economics, Springer, vol. 63(1), pages 1-29, April.
    • Handle: RePEc:kap:regeco:v:63:y:2023:i:1:d:10.1007_s11149-022-09455-6
    DOI: 10.1007/s11149-022-09455-6
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