Can the Belt and Road Initiative reduce pollution in enterprises?—Evidence from quasi-natural experiments

Abstract

Based on a micro-economic entity perspective, this paper empirically examines the effect of the Belt and Road Initiative (BRI) on environment pollution of Chinese enterprises and its underlying mechanism. We found that: (1) The BRI could significantly reduce the environment pollution of enterprises supported by the BRI in China. (2) In consideration of a series of robustness test, including placebo tests, Propensity Score Matching-Difference-in-Differences (PSM-DID) test, controlling the geographical characteristics that enterprises located or registered, our core conclusion is still robust and reliable. (3) In terms of mechanism analysis, the government policies play an important role in driving enterprises to reduce environment pollution. (4) The heterogeneity results show that the environment pollution reduction effect of the BRI is more significant for state-owned enterprises, enterprises belonging to manufacturing and mining industries. Moreover, the pollution reduction effect is more significant for enterprises with low level of innovation. The findings provide theoretical and practical insights into the environment pollution reduction effect of the BRI.