The unintended impact of environmental regulation on China’s hog sector

Abstract

In China, environmental regulations in relation to the hog sector are considered a key strategy for reducing pollution; however, these regulations may cause unintended effect that reduce hog production and change the distribution. In this research, we discussed the effect of abrupt campaign-style environmental regulation on the hog industry in China. Using a unique panel of national county-level hog production data, we empirically demonstrate that place-based differentiated environmental regulations lead to an unexpected decline in hog production in some regions. The implementation of central government policy varies in different regions, with restricted development areas subject to stricter environmental regulations compared to key development areas. However, such difference not only exists between provinces, but also within provinces. The results highlight the importance of formulating more refined regulation standards rather than placed-based regulation in China for future reforms, which is essential for maintaining stable production and reducing pollutions at the same time. Subject classification codes:Q28