Details

Autor(en) / Beteiligte

• Kong, Dongmin
• Zhu, Ling

Titel

Governments’ Fiscal Squeeze and Firms’ Pollution Emissions: Evidence from a Natural Experiment in China

Ist Teil von

• Environmental & resource economics, 2022-04, Vol.81 (4), p.833-866

Ort / Verlag

Dordrecht: Springer Netherlands

Erscheinungsjahr

2022

Quelle

PAIS Index

Beschreibungen/Notizen

• We investigate whether and how government fiscal squeeze affects local firms’ pollution emissions. To establish causality, we introduce a policy shock in China, namely, the canceling of agricultural taxes in 2005, to document that governments’ fiscal squeeze due to sudden tax decreases substantially increases local firms’ emission by approximately 4%. Mechanism analyses show that local fiscal squeeze result in aggravating pollution emissions through inducing the reduction of firms’ efforts on green innovation and abatement activities. Cross-sectionally, the effects of local government fiscal squeeze on pollution emissions are mitigated by environmental regulation, marketization development, but strengthened by firm financial pressure.