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Strategic Interactions in Environmental Regulation Enforcement: Evidence fromChinese Provinces

Author

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  • Mary-Françoise RENARD

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Hang XIONG

Abstract

This paper studies whether Chinese provinces set strategically their environmental stringency when faced with interprovincial competition for mobile capital. Using Chinese provincial data and spatial panel econometric models, we find that Chinese provinces do engage in this kind of strategic interaction, particularly among those with similar industrial structure. Furthermore, we haven’t found evidence of asymmetric responsiveness suggested by the race to the bottom theory. Finally, the one-sided fiscal decentralization is likely to strengthen the strategic behavior. These empirical results call for a skeptical attitude towards China’s decentralization of environment policy implementation as well as its fiscal arrangements.

Suggested Citation

  • Mary-Françoise RENARD & Hang XIONG, 2012. "Strategic Interactions in Environmental Regulation Enforcement: Evidence fromChinese Provinces," Working Papers 201207, CERDI.
    • Handle: RePEc:cdi:wpaper:1327
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    References listed on IDEAS

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    1. Dijkstra, Bouwe R., 2003. "Direct regulation of a mobile polluting firm," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 265-277, March.
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    6. Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November.
    7. Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(2), pages 203-230, June.
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    Cited by:

    1. Fabien Candau & Elisa Dienesch, 2013. "Does Globalization explain Urbanization in the World and in Asia?," Working Papers hal-01847940, HAL.
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    3. Pengsheng Li & Yanying Chen, 2019. "The Influence of Enterprises’ Bargaining Power on the Green Total Factor Productivity Effect of Environmental Regulation—Evidence from China," Sustainability, MDPI, vol. 11(18), pages 1-20, September.
    4. Fabien Candau & Elisa Dienesch, 2013. "Does Globalization explain Urbanization in the World and in Asia?," Working papers of CATT hal-01847940, HAL.
    5. Shijin Wang & Guirong Ji & Zhaolian Hu & Fangdao Qiu, 2022. "Research on the Spatial Correlation of China’s Haze Pollution and the Government’s Cooperative Governance Competitive Strategy," IJERPH, MDPI, vol. 20(1), pages 1-15, December.
    6. Yuan, Kaihua & Cui, Jingyuan & Zhang, Haipeng & Gao, Xiang, 2023. "Do cleaner production standards upgrade the global value chain position of manufacturing enterprises? Empirical evidence from China," Energy Economics, Elsevier, vol. 128(C).
    7. Chagas, André L.S. & Azzoni, Carlos R. & Almeida, Alexandre N., 2016. "A spatial difference-in-differences analysis of the impact of sugarcane production on respiratory diseases," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 24-36.
    8. Yu, Yongze & Li, Ke & Duan, Shenglan & Song, Chenchen, 2023. "Economic growth and environmental pollution in China: New evidence from government work reports," Energy Economics, Elsevier, vol. 124(C).

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    More about this item

    Keywords

    China; Strategic interaction; Pollution; Spatial panel;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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