Government environmental signals, government–Enterprise collusion and corporate pollution transfer

Xiaosheng Li, Ruirui Wang, Zhiyang Shen and Malin Song

Energy Economics, 2024, vol. 139, issue C

Abstract: To optimize the implementation of environmental policies and foster green development in China's economy, it is crucial to be vigilant about corporate pollution transfer behaviors and regulate collusive relationships between local governments and enterprises. This study introduces a theoretical four-way game model to explore the impact of corporate pollution transfer, considering environmental regulation by the central government and third-party oversight, as well as collusion between local governments and firms. Using data from China's A-share listed companies from 2007 to 2021, this study examines whether polluting firms engage in pollution transfer in response to environmental policies, with the Low-carbon City Pilot Policy (LCPP) serving as a proxy for government environmental signals. The findings reveal that the LCPP generally affects corporate pollution transfer. Mechanism analysis shows that the LCPP reduces pollution transfer through both formal and informal regulatory channels. Heterogeneity analysis further indicates that the pollution transfer effect is more pronounced in local state-owned enterprises, companies with a history of financial fraud, and highly polluting industries. Additionally, the study highlights that collusion between the government and enterprises promotes corporate pollution transfer, while changes in local government personnel disrupt this collusion and reduce pollution transfer. The research also identifies the supply chain as a key transmission path for pollution transfer. This work not only advances theoretical and empirical understanding of corporate behavior under environmental policy influence but also enriches research on government-enterprise relations and the effectiveness of environmental policies. It offers theoretical support and policy recommendations for constructing a rational green economic development system in China.

Keywords: Low-carbon city pilot policy; Pollution transfer; Government–enterprise collusion; Transfer pathways (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988324006431
Full text for ScienceDirect subscribers only

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:eee:eneeco:v:139:y:2024:i:c:s0140988324006431

DOI: 10.1016/j.eneco.2024.107935

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().