Regional production restriction policy and firms’ green transition: Evidence from Beijing-Tianjin-Hebei region

Abstract

Taking the regional production restriction policy in the Beijing-Tianjin-Hebei region and surrounding areas (BTH2+26) -- Chinese off-peak production (COPP) policy in heating season from 2017 -- as a quasi-natural experiment, this paper adopts the DID method to explore how the COPP policy impacts firms' green transition from the dual perspective of pollutant emissions reduction and efficiency gains and its internal mechanism. The results show that: (1) The COPP policy can significantly reduce air pollutant emissions without decreasing the TFP of Chinese heavy-polluting listed companies in BTH2+26. (2) Mechanism analysis find that the COPP policy can achieve firms’ green transition that combined emission reduction and efficiency gains, which is due to the promotion effect of technological innovation activities and the reduction effect of environmental costs. (3) Further analysis shows that the COPP policy on the innovation output ability of Chinese heavy-polluting companies in BTH2+26 is greater than that on the innovation input ability. (4) Heterogeneity analysis shows that the COPP policy has a more significant promoting effect on the green transition of private enterprises. Our paper can provide empirical evidence and policy recommendation for the Chinese government to promote pollution control in specific regions.