Can Local Government Debt Decrease the Pollution Emission of Enterprises?—Evidence from China’s Industrial Enterprises

Xie, Hai; Zhang, Weikun; Liang, Hanyuan

doi:10.3390/su15119108

Cited by 4 publications

(2 citation statements)

References 39 publications

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“…Xie et al. (2023) demonstrated that local government debt levels significantly reduce corporate environmental emissions in China. Likewise, Bachegour and Qafas (2023) demonstrated that Morocco's carbon dioxide emissions are significantly impacted negatively by its external debt.…”

Section: Literature Reviewmentioning

confidence: 99%

Balancing the scales: Does public debt and energy poverty mitigate or exacerbate ecological distortions in Nigeria?

Ezenekwe,

Okere,

Dimnwobi

et al. 2023

Int Social Sci J

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Amid Nigeria's economic growth and energy challenges, the escalating public debt (PB) levels and persistent energy poverty (EP) raise critical questions about their potential impacts on the environment. Given the potential conflict among economic development, EP alleviation and ecological conservation, it becomes pertinent to understand whether increased PB and efforts to address EP inadvertently contribute to or alleviate ecological imbalances within the country. Hence, this research investigates the effect of PB and EP on the load capacity factor (LCF) in Nigeria. Using the STIRPAT model and annual data from 1990 to 2021, the study explores the relationships among total PB, EP, gross domestic product per capita, urbanization and LCF. Descriptive analysis, correlation assessments and unit‐root tests precede the data analysis conducted with the autoregressive distributed lag (ARDL) model and dynamic ARDL (DARDL) technique. Key findings reveal significant negative effects of urbanization and EP on LCF. Additionally, the ARDL and DARDL procedure highlights a positive long‐term relationship between PB and LCF. Both ARDL and DARDL analyses show a negative short‐term relationship between GDP growth per capita and LCF, signalling the need for sustainable economic practices. The study concludes with policy recommendations that aim to promote sustainable development and address ecological imbalances by tackling EP and PB challenges in Nigeria.

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Section: Literature Reviewmentioning

confidence: 99%

Balancing the scales: Does public debt and energy poverty mitigate or exacerbate ecological distortions in Nigeria?

Ezenekwe,

Okere,

Dimnwobi

et al. 2023

Int Social Sci J

View full text Add to dashboard Cite

show abstract

“…This, in turn, accentuates the level of pollution attributable to firms, particularly those located in areas characterized by weaker financial resilience and lower governance quality. Moreover, Xie et al (2023) [14] confirmed a substantial positive correlation between local government debt and the pollution emissions of firms. They further ascertain that this is realized through the means of increased investments in fixed assets and a reduction in firms' R&D expenditures.…”

Section: Introductionmentioning

confidence: 97%

Local Government Debt and Corporate Investment Behavior in China: Real versus Financial Investment

Wu,

Tian,

Wang

2023

Sustainability

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The ongoing expansion of local government debt (LGD) in China constitutes a significant impediment to economic development, while the existing literature predominantly concentrates on macro-level investigations, neglecting the repercussions of government debt expansion on firms. Firms serve as fundamental constituents of the real economy, and the suitability of their investment structure is a pivotal determinant of their robust development. Therefore, it is of great significance to investigate whether the investment structure of non-financial firms will undergo deviations attributable to the expansion of local government debt. This paper uses a two-way fixed-effects model to examine the causal effect of local government debt on firms’ investment structures. The quasi-natural experiment using the DID model with “Document 43” issued by China on local government debt governance as a policy shock can be a good endogeneity test. It is found that local government debt exacerbates the trend of “exit from real to virtual” of enterprises, leading to a bias towards financial investment in the investment structure of enterprises, and this result is still robust after a series of robustness tests. A heterogeneity analysis shows that the impact of LGD on the investment structure of firms mainly exists in non-state-owned firms, small-scale firms, and firms with high financing constraints. Overall, this study provides new evidence on how the government influences the investment structure of Chinese firms through the perspective of LGD, which helps firms to prevent and cope with the risks associated with LGD. Furthermore, it offers practical references and policy insights for government initiatives in the realm of local debt governance.

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How does financial openness affect pollution emission of industrial enterprises?—Empirical evidence from the entry of foreign banks in China

Liu,

Bao,

Qiu

et al. 2023

Sustainable Development

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Currently, the effects of financial openness (FO) on the environment have not been assessed at the micro level of enterprises. This article uses the difference‐in‐differences method to explore the pollution abatement effect of FO. The results show that FO can effectively promote pollution abatement with a significant environmental performance enhancement effect. In addition, the pollution abatement effect of FO is stronger in large, heavy industrial, and state‐owned enterprises. Besides, FO significantly alleviates financing constraints and promotes the pollution abatement by driving R&D investment and strengthening the intensity of end‐of‐pipe treatment. Policy recommendations are given to steadily expand the FO pattern, improve the financial disclosure system of small and medium‐sized enterprises, and optimize subsidies for increased R&D investment to stimulate pollution abatement. A reference for other emerging economies, especially transitioning economies, is provided to fully utilize the financial system under construction or improvement to realize the value of pollution control.

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Can Local Government Debt Decrease the Pollution Emission of Enterprises?—Evidence from China’s Industrial Enterprises

Cited by 4 publications

References 39 publications

Balancing the scales: Does public debt and energy poverty mitigate or exacerbate ecological distortions in Nigeria?

Balancing the scales: Does public debt and energy poverty mitigate or exacerbate ecological distortions in Nigeria?

Local Government Debt and Corporate Investment Behavior in China: Real versus Financial Investment

How does financial openness affect pollution emission of industrial enterprises?—Empirical evidence from the entry of foreign banks in China

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