Booster or barrier? Can ecological accountability system reform inhibit environmental violations? Evidence from quasi-natural experiment

Sheng Liu (), Hongyi Zou () and Xiuying Chen ()
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Sheng Liu: Guangdong University of Foreign Studies
Hongyi Zou: Guangdong University of Foreign Studies
Xiuying Chen: Guangdong University of Finance

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 5, No 31, 11703-11727

Abstract: Abstract Environmental protection supervision is an important manifestation of ecological accountability system reform. Taking the implementation of China’s central environmental protection inspection (CEPI) policy as a quasi-natural experiment, this paper applies the time-varying difference-in-difference (DID) model to identify the impact of the CEPI policy on the likelihood of enterprises’ environmental violations. The main conclusions include: (1) the implementation of CEPI policy is conducive to inhibiting environmental violations. After a series of robustness tests, including the parallel trend test, the placebo test, the exclusion of policy interference, and the replacement of explained variables, the result remains robust. In terms of dynamic perspective, there is a lag in the impact of CEPI policy on enterprises’ environmental violations. (2) The effect of CEPI policy is more prominent on samples of large enterprises, enterprises with highly concentrated equity, enterprises that polluted heavily, enterprises owned by executives with a political background, and enterprises that are situated in regions with higher level of marketization and more developed information infrastructure. (3) The CEPI policy can restrain the environmental violations of enterprises by a dual mechanism of releasing punishment and deterrence signals from the external governance, and forcing enterprises to enhance environmental management system from the internal governance.

Keywords: Central government inspection; Environmental violations; Ecological accountability system reform; Central-local coordinated governance; Quasi-natural experiment (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03457-w

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