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Effect of Environmental Decentralization on Polluting Firms in India

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  • Stefania Lovo

Abstract

This paper examines the impact of environmental decentralization on the birth of polluting firms in India. It focuses on a 2006 reform of the environmental impact assessment process and adopts a triple-differences approach that compares treated and untreated sectors across states with different levels of environmental stringency. Results based on firm-level data for the period 1998-2012 show that the decentralization induced a decrease in firm births in states with stricter enforcement. The findings draw attention to the consequences of large disparities in enforcement capacity when fostering decentralization.

Suggested Citation

  • Stefania Lovo, 2018. "Effect of Environmental Decentralization on Polluting Firms in India," Economic Development and Cultural Change, University of Chicago Press, vol. 67(1), pages 55-94.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/697558
    DOI: 10.1086/697558
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    Cited by:

    1. Zhihong Zeng & Chen You, 2022. "The Price of Becoming a City: Decentralization and Air Pollution—The Evidence from the Policy of County-to-City Upgrade in China," IJERPH, MDPI, vol. 19(23), pages 1-18, November.
    2. Shyam Nath & Yeti Nisha Madhoo, 2021. "Environmental fiscal federalism and atmospheric pollution: A tale of two Indian cities," ASARC Working Papers 2021-01, The Australian National University, Australia South Asia Research Centre.
    3. Weibing Li & Yongwen Yang, 2024. "The effect of environmental centralisation on productivity: Evidence from an administrative reform in China," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 824-851, March.
    4. Jiang, Qisheng & Tang, Pengcheng, 2023. "All roads lead to Rome? Carbon emissions, pollutant emissions and local officials’ political promotion in China," Energy Policy, Elsevier, vol. 181(C).
    5. Cui, Liyuan & Chen, Zeyu & Huang, Yanfen & Yu, Huayi, 2024. "Window dressing: Changes in atmospheric pollution at boundaries in response to regional environmental policy in China," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    6. Feihong Zheng & Rongxin Diao & Hongsheng Che, 2024. "Environmental Decentralization, Digital Financial Inclusion, and the Green Transformation of Industries in Resource-Based Cities in China," Sustainability, MDPI, vol. 16(17), pages 1-26, September.
    7. 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.
    8. Bin Luo & Zhenhai Liu & Sichao Mai, 2023. "The Impact and Internal Mechanism of Environmental Decentralization on Green Total Factor Production," Sustainability, MDPI, vol. 15(1), pages 1-13, January.

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