Heterogeneity of environmental protection law’s impact on firms’ pollutant discharge

Abstract

In 2015, China revised its Environmental Protection Law to strengthen regulations on firms’ pollution discharge. However, the efficacy of this law in protecting the environment remains unclear. Using panel data from China’s listed firms spanning from 2010 to 2020, this paper applies the continuous difference model to analyze the impact of the Environmental Protection Law on firms’ pollutant emissions. The results demonstrate a significant and consistent reduction in both total pollutant emissions and pollutant emissions per outcome for firms due to the implementation of the Environmental Protection Law. Additionally, the study indicates a significant reduction in pollutant emissions among firms that did not receive environmental protection subsidies, state-owned enterprises, and firms without prior environmental pollution behaviors. The findings also suggest a two-year lag for the Environmental Protection Law to impact firms’ pollution emissions per outcome. These results carry important practical implications for the government’s efforts to transform environmental protection policies and for firms seeking to enhance their environmental performance.

Effect of River Chief System on Carbon Emission Efficiency: Evidence from China

“…Faced with the pressure of carbon emissions, the Chinese government often seeks breakthroughs at the policy level. Currently, the government has effectively promoted China's carbon emission reduction process through various policies and practices, such as environmental protection laws and regulations [2], environmental governance investment [3], and lowcarbon city pilot projects [4]. These carbon reduction policies share a common feature, as they are mostly mandatory policies issued by the Chinese central government and implemented by local governments, which we refer to as top-down environmental regulatory Author Copy • Author Copy • Author Copy • Author Copy • Author Copy • Author Copy • Author Copy • Author Copy • Author Copy policies.…”