The Impact of Heterogeneous Environmental Regulations on Location Choices of Pollution-Intensive Firms in China

Chenghui Tang,Jianmin Dou

doi:10.3389/fenvs.2021.799449

Abstract

The spatial transfer pattern and dynamic mechanisms of pollution-intensive industries are key issues for national and regional sustainable development. Although previous studies have emphasized the impact of environmental regulations on the transfer of pollution industries, there is a lack of firm-level analysis of the combined effects of different types of environmental regulations and other factors on them, which has led to the pollution haven hypothesis remaining contested. In order to provide micro evidence to test the pollution haven hypothesis, this paper reveals the temporal and spatial evolution of pollution-intensive foreign firms’ distribution in China, and explores the impact of heterogeneous environmental regulations on the location choices by using spatial analysis and zero-inflated negative binomial regression. The empirical results were as follows: Firstly, pollution-intensive foreign firms were highly concentrated in the eastern developed region and have a strong path dependency in China. Secondly, environmental regulations, especially the market-based environmental regulation, had a significant negative impact on the location choices of pollution-intensive foreign firms. Thirdly, the spatial distribution of pollution-intensive foreign firms was strongly influenced by new economic and geographic factors. Fourthly, pollution-intensive foreign firms have a significant pollution border effects in developed regions but not in economically less-developed regions due to transportation costs. The governments are expected to adopt heterogeneous environmental regulations based on the level of regional economic development to avoid the pollution haven phenomenon, thus achieving a sustainable development.

Highlights

Since the 1990s, the international division of labor has been continuously refined, and a new wave of global industrial restructuring has been formed (Luo et al, 2021)
The results indicated that the market-based regulations in economically developed regions were more effective on the location choices of pollution-intensive firms, while the command-and-control regulations in economically backward regions were more effective in influencing the location choices of pollution-intensive firms
The impact of heterogeneous environmental regulations was explored on the location choices of pollution-intensive firms by zero-inflated negative binomial regression (ZINB) regression

Summary

Introduction

Since the 1990s, the international division of labor has been continuously refined, and a new wave of global industrial restructuring has been formed (Luo et al, 2021). Location Choice of Pollution Firms and emerging economies government to reduce the excessive concentration of pollution-intensive firms and emissions of pollution Such as Germany, France and Italy, which have adopted environmental taxes as the environmental regulation (Sharma et al, 2021), and Singapore, Korea, Thailand and Malaysia, which have adopted command-and-control and market-based environmental regulations to avoid their negative effects (Shahzad et al, 2021; Waris et al, 2021; Paramati et al, 2022). This study would contribute to alleviating the excessive concentration of polluting enterprises so as to reduce pollution emissions (SDG-7: Affordable and clean energy; SDG-13: Climate Action) (Ishikawa and Okubo, 2017; Shahzad, 2020), and help to promote the sustainable growth of urban economy and environment and reduce environmental inequalities between countries (SDG-10: Reduce inequality within and among countries; SDG-11: Sustainable Cities and Communities) (Laplue, 2019) It is this way that dedicates to the achievement of global sustainable development goals

Methods

Findings

Discussion

Conclusion