The effect of the county-to-district conversion policy on energy efficiency of enterprises: Evidence from China

Weihua Yu, Wenjing Liang and Xin Yao

Energy Economics, 2024, vol. 134, issue C

Abstract: Enhancing the energy efficiency of enterprises is of paramount significance not only in addressing energy scarcity and environmental pollution issues but also in achieving the crucial objectives of carbon neutrality. Our paper utilizes the staggered Difference-in-Differences (DID) approach to accurately identify the causal effect of the adjustment of administrative division (county-to-district conversion) on the energy efficiency of enterprises in the affected regions, contributing valuable insights to the broader field of regional economic development and energy-saving policy formulation. The empirical analysis reveals that the county-to-district conversion reform has resulted in a noteworthy decline in energy efficiency among enterprises within the reformed counties compared to their comparable counterparts. Further mechanism analysis reveals that county-to-district conversion policy led to a reduction in government subsidies, an increase in tax burdens, and heightened debt costs, thereby diminishing the energy efficiency of enterprises. Heterogeneous tests from the government's perspective indicate that enterprises located in strong counties, those situated in areas with higher degree of dependence on land finance, and those facing less pressure for energy conservation and emission reduction experience a greater pronounced decline in energy efficiency. Our research outcomes emphasize the necessity of moving away from resource-intensive growth approaches and embracing strategies that promote high-quality development.

Keywords: Energy efficiency; County-to-district conversion; Staggered DID; Government subsidies; Tax burdens (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:134:y:2024:i:c:s0140988324003268

DOI: 10.1016/j.eneco.2024.107618

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