Administrative Boundary Reforms and Firm Pollution in China: Institutional Path Divergence and Spatial Reallocation of Pollution

Yuting Chen and Xuancheng Qin

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Abstract: Administrative boundary reforms in China alter the assignment of local authority and growth incentives without changing physical geography. We study two reforms with opposite institutional content---county-to-district (centralization: a county absorbed into a municipality as an urban district) and county-to-city (empowerment: a county upgraded to a county-level city)---using a firm-year pollution panel (1998--2013) and a border-pair research design that compares firms on opposite sides of the same county border. Centralizing reform lowers local NOx intensity by 14.8% through cleaner production, without shrinking output or employment; empowering reform raises COD, dust, and wastewater levels by 87--95\% through dirty growth. The local abatement is not net abatement: NOx rises in same-prefecture neighbor counties (+0.77, p

Date: 2026-10
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