Law Reinforcement, Production Pattern and Enterprise Environmental Performance: Evidence from Environmental Courts in China

Dandan Zhu (), Xinping Tao and Meibo Huang
Additional contact information
Dandan Zhu: School of Economics, Sichuan Agricultural University, Chengdu 611130, China
Xinping Tao: School of Economics and Management, Xinjiang Agricultural University, Urumqi 830052, China
Meibo Huang: Institute of International Business, Shanghai University of International Business and Economics, Shanghai 201620, China

Sustainability, 2023, vol. 15, issue 5, 1-20

Abstract: Law reinforcement agencies can be established to improve enterprise environmental performance, a determinant of sustainable growth, but their micropractical evaluation is unclear. This paper uses panel data (1998–2014) from the Chinese Industrial Enterprise Pollution Database and the Chinese Industrial Enterprise Database and adopts the multiperiod difference-in-differences (DID) method to investigate the impact of law reinforcement on enterprise environmental performance (measured by air pollutant emissions). Using the establishment of China’s city-level environmental courts (ECs) as an identification strategy, the study finds a strong positive effect of EC establishment on firms’ environmental performance and confirms the validity of law reinforcement. Furthermore, the effects are heterogeneous for firms with different characteristics (including scale, profit, ownership, pollution intensity and location). Notably, we find that firms improve their environmental performance by changing their production pattern and energy consumption structure. Additionally, ECs could influence firms’ environmental behaviors by enhancing judicial efficiency and generating a deterrence effect. These findings show the government could improve enterprises’ environmental performance through law reinforcement but should consider the heterogeneous effect on different firms.

Keywords: air pollution; law reinforcement; enterprise environmental performance; environmental court; difference-in-differences (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/5/4440/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/5/4440/ (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:jsusta:v:15:y:2023:i:5:p:4440-:d:1085263

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

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