Does Environmental Policy Help Green Industry? Evidence from China’s Promotion of Municipal Solid Waste Sorting

Di Chen, Yue Wang, Yang Wen, Honglin Du, Xue Tan, Lei Shi and Zhong Ma
Additional contact information
Di Chen: School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China
Yue Wang: School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China
Yang Wen: China Academy of Macroeconomic Research, Beijing 100038, China
Honglin Du: School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China
Xue Tan: State Grid Energy Research Institute Co., LTD, Beijing 102209, China
Lei Shi: School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China
Zhong Ma: School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China

IJERPH, 2021, vol. 18, issue 6, 1-15

Abstract: As municipal solid waste severely threatens human health and the ecological environment, since 2019, China has started to fully practice MSW sorting in all prefecture-level cities. In this paper, we apply the event study and difference-in-difference methods to investigate how China’s green policy of promoting MSW sorting influences listed waste sorting companies from the perspective of investors’ short-term and long-term reactions. This paper finds that investors are not sensitive to the introduction of MSW sorting in the short term, the new environmental policy does not relieve the financing constraints of related enterprises in the long run, and the financing constraints of private enterprises are stricter than those of state-owned enterprises. These findings indicate that China’s current encouragement of garbage sorting is not efficient enough as it has not brought benefits to the waste classification industry yet. More measures need to be taken to eliminate uncertainties in urban waste sorting. Our paper enriches the research on China’s waste sorting practices and provides new evidence of the effects of environmental policy on related firms from the perspective of green industry.

Keywords: waste sorting; investor reaction; event study; DID; China (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/1660-4601/18/6/2799/pdf (application/pdf)
https://www.mdpi.com/1660-4601/18/6/2799/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jijerp:v:18:y:2021:i:6:p:2799-:d:514122

Access Statistics for this article

IJERPH is currently edited by Ms. Jenna Liu

More articles in IJERPH from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().