Is the environment a victim of the economic downturn? Evidence from China's manufacturing firms

Xuemei Zhang, Haitao Yin and Huimin Yang

Environment and Development Economics, 2023, vol. 28, issue 2, 191-209

Abstract: This paper investigates whether pollution-intensive industries develop faster in a time of economic downturn. Using firm-level panel data from 2005 to 2013, we find supporting empirical results in an analysis of China's manufacturing industries in the 2008 economic crisis. We find that pollution-intensive firms tended to produce more compared with non-pollution-intensive firms in the 2008 economic crisis, with the pre-crisis period as a baseline. We further find that this effect is more pronounced in areas with higher export dependence and a smaller proportion of production from pollution-intensive industries. The relatively faster production expansion in pollution-intensive industries is more evident for state-owned enterprises.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:cup:endeec:v:28:y:2023:i:2:p:191-209_5

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