The control of border pollution: The lure from political promotion incentives

Abstract

This study examines the relationship between local political promotion incentives and border pollution governance. By utilizing the Reform of Political Performance Assessment Standards in China as a quasi-natural experiment, the results reveal that political promotion incentives significantly reduce wastewater discharge by border firms, resulting in a substantial reduction of 7.1% and a cost-saving of 23,487.7 million yuan for society. The improvement in border pollution can be attributed to the fact that border firms, by increasing investments in wastewater discharge facilities, manage to achieve a less pronounced increase in wastewater discharge compared to their production scale. The effectiveness of emission reduction in border pollution is more prominent in the subsample of non-politically connected, high-pollution industries, as well as in political rotation nodes. This study provides empirical evidence from micro-level enterprises in China for the first time, enriching the political economy research on border pollution governance in the field of new economic geography.