Enforcement In China Research Articles

Impact of mandatory environmental information disclosure on the capital cost: Evidence from listed companies in China

Mandatory environmental information disclosure is characterized by formal environmental regulation and that the content of the disclosure promotes public participation and oversight in the environmental field. This paper studies the impact of mandatory environmental information disclosure (EID) enforcement in China on corporate capital cost using a difference-in-difference model. The results indicate that mandatory EID increases debt capital cost, but has no significant impact on equity capital cost, which differs from mainstream research that suggest EID can reduce capital cost. Mechanism tests reveal that mandatory EID raises debt capital cost by deteriorating the financial performance of enterprises. Further research finds that the mandatory EID also reduce enterprise's total debt amount and restructure debt structure by increasing short-term liability and decreasing long-term liability. In addition, the increasing effect of mandatory EID on the debt capital cost is more pronounced among non-SOE corporations, small-scale corporations and recession corporations. This study provides new empirical evidence for the impact effectiveness of mandatory EID and suggests different research views in the related field.

Law, politics, and trade credit in China

This paper explores the interplay between politics and law enforcement in China and its effects on firm financing decisions. By examining a sample of corporate lawsuits involving listed firms in China, we find that politically connected firms are less likely to be defendants, have higher win rates, and experience shorter litigation durations than non-connected firms. Additionally, we observe that firms with higher legal risk extend more accounts receivable and receive less accounts payable, but this relationship holds only for non-connected firms. Our findings support the financing advantage theory for politically connected firms and the legal risk compensation view for non-connected firms. Moreover, reforms in China's judicial system do not appear to mitigate the disadvantages faced by non-connected firms in terms of lawsuit outcomes and trade credit provision. Our findings suggest that well-functioned judicial independence might be still lacking in China, and that political connections continue to negatively impact law enforcement and corporate policies.

Curbing Elite Capture or Enhancing Resources: Recentralizing Local Environmental Enforcement in China

Abstract Decentralization is believed to ensure better environmental governance. However, recent studies have shown that some governments recentralize local enforcement to increase the effectiveness of policy implementation. Under what conditions is recentralization the better option for environmental enforcement? This study attempts to differentiate two possible mechanisms through which recentralization can deliver better environmental outcomes: curbing elite capture and enhancing local resources. In the context of recentralization reform and with a unique dataset of local investigations into China's environmental enforcement, we demonstrate that although decentralization has been successful from many perspectives, recentralizing local environmental enforcement can produce better outcomes for pollution reduction in China, by curbing local protectionism rather than enhancing local resources. Further qualitative analysis reveals why recentralization cannot necessarily enhance local resources and capacity, even though it is designed to do so.

Campaign-style law enforcement in China: Causes and consequences

This article aims to address two primary research questions: first, why does the Chinese government consistently favour campaign-style law enforcement, and second, what are the consequences of this law enforcement approach for China's criminal justice system? Drawing on a review of the existing literature and official documents on anti-crime campaigns, as well as interview data concerning local policing problems, this article offers both top-down and bottom-up explanations regarding the government's persistent employment of campaign-style law enforcement to tackle serious and organised crime. The top-down approach perceives China's anti-crime campaigns as elite-engineered moral panics and the result of political elites’ long-standing tendency towards “heavy penaltyism.” The bottom-up approach focuses on the failure of routine law enforcement and collusion between local officials and gangsters, which necessitates anti-crime campaigns. To illustrate the consequences of campaign-style law enforcement on the criminal justice system, this article explores empirical data collected during China's latest “Sweep Away Black Societies and Eliminate Evil Forces” campaign and highlights the costs of campaign-style law enforcement, such as eroding the rule of law, generating a criminal justice pendulum and creating serious procedural injustices.

Does Environmental Court Lead to Local Green Growth? Evidence from 230 Cities in China

To tackle the multifaceted environmental challenges and bolster environmental law enforcement in China, environmental courts have proliferated across many cities since 2007. However, their actual effects on economic growth, a central concern for governments at all levels, have yet to be thoroughly investigated. Leveraging the panel data of 230 cities from 2007-2016 and taking the establishment of environment courts as a quasi-natural experiment, this paper uses the difference-in-differences (DID) approach to examine the effects of building environmental courts on green economic growth at the prefectural level. We find that first, the effect is positive and significant; second, on possible channel for the boosting effect of environment court is through increasing technological innovation; third, the effect of court on green growth is more significant after two to three years. These findings provide references for both scholars of environmental politics and practitioners of green development in local governments.

Does target-based performance evaluation system reduce pollution emissions? Firm-level evidence from China

This paper sheds light on the effectiveness of a concrete target-based performance evaluation system (TPES) for localities in enhancing local environmental enforcement in China. We conduct a difference-in-differences (DID) specification and exploit unique firm-level data to investigate the effects of the TPES on SO2 emission reduction through the Two control Zones (TCZ) policy. The results suggest that the TPES significantly reduces SO2 emissions of firms located at the TCZ cities, both in extensive and intensive margins. We also find that the treatment effects vary largely across enterprise sizes, ownership types, and local economic development. Our findings further verify how the long-standing distortions in the decentralized implementation of nationwide environmental regulations in China are remedied with a proper performance evaluation system.

Environmental monitoring and enforcement in China: an economic perspective review

ABSTRACT Over the past two decades, China has actively engaged in pollution prevention and control efforts amidst growing environmental challenges. This review aims to provide an overview of China’s historical milestones, current status, and evolving trends in environmental monitoring and enforcement, and findings in the recent literature. Despite persistent issues in enforcement and compliance, China has been making significant strides in tackling environmental challenges by adapting its institutions, designing effective policies, and leveraging technological advancements. Overall, this review underscores the importance of continued efforts to address environmental challenges in China and provides implications for developing countries in environmental monitoring and enforcement practices. The review also explores the emerging opportunities in policy and research in this domain.

The Practical Effectiveness of the Singapore Mediation Convention on the Protection of Intellectual Property Rights in China's Cross-Border E-commerce and Lessons Learned

Objective: This study aims to thoroughly assess the impact of the Singapore Mediation Convention (SMC) on intellectual property rights (IPR) enforcement within China's e-commerce industry. The focus is on key indicators: dispute frequency, resolution efficiency, and stakeholder trust. Using Python and libraries like pandas, numpy, and seaborn, a quantitative analysis is conducted on twelve monthly observations, comparing pre and post-SMC implementation to quantify observed changes.
 
 Methods: For this research, a robust quantitative framework is deployed, leveraging Python and essential libraries. The approach involves a comparative analysis of data collected before and after SMC implementation. The twelve-month sample size ensures comprehensive representation. This method enables a nuanced understanding of SMC's impact on dispute frequency, resolution efficiency, and stakeholder trust.
 
 Results: Findings show a noticeable reduction in disputes and shorter resolution times post-SMC implementation, indicating positive impacts. Stakeholder trust has significantly risen, reflecting increased confidence in the industry. These quantitative outcomes collectively affirm the SMC's efficacy in fostering a secure and trustworthy environment for IPR enforcement in China's e-commerce landscape.
 
 Conclusion: In conclusion, this study underscores the positive influence of the Singapore Mediation Convention on IPR enforcement in China's e-commerce. Reduced disputes, improved resolution efficiency, and heightened stakeholder trust showcase the SMC's instrumental role. Beyond addressing IPR challenges, these findings emphasize the broader impact of mediation conventions in cultivating an environment conducive to thriving e-commerce activities.

The impact of major pollution incidents on environmental performance

Recent work has shown that serious environmental incidents may act as trigger events to produce stronger regulatory enforcement in China. After a major pollution incident, Chinese authorities often impose severe penalties on polluters as a means to prevent future incidents and appease the public. In this paper, we examine how this increased regulatory stringency might affect firms’ environmental performance. We select Level I (extremely serious) and Level II (serious) environmental incidents from 2009 to 2019 as trigger events. Using city-level panel data on environmental violations, we find a significant deterrent effect of the incidents on violations: in the period following an incident, the number of violations falls roughly by 8%–11%. The effect is primarily driven by the incidents caused by illegal discharge of toxic pollutants. Other incidents, such as production safety accidents or traffic accidents, do not exert significant effects on environmental performance.

Court–Government Interaction in the Context of Administrative Litigation and Competition Enforcement in China

Abstract: Widespread court–government interaction over the past 15 years challenges the conventional view that such interaction should be banned in the context of administrative litigation. Indeed, underpinning institutions enable courts and governments to coordinate and cooperate in law enforcement. In addition, first-hand litigation materials demonstrate that court–government interaction has yielded some benefits regarding law enforcement. To alleviate judicial unfairness and to realise an outcome whereby the pros outweigh the cons, ex parte communication should be prohibited, while other forms of court–government interaction should be maintained. Drawing on the lessons from court–government interaction in the context of administrative litigation in general, this article suggests that benign interaction between courts and competition agencies could enhance competition enforcement. The author deduces from the findings that China follows its own path on the rule of law, which exhibits its own characteristics.

Study on ecological environment damage compensation in China

To provide more theoretical support for improving the ecological environment damage compensation system, this paper discusses policy design and enforcement in China in recent years. A flow chart is summarized to clarify the whole implementation process and extract the characteristics of the policies implemented in China now. An evaluation system that refers to these characteristics is built to measure their pros and cons. This evaluation system is based on six key indicators: official value criteria, the management of compensatory payments, executive efficiency, emergency efficiency, responsibility fulfillment and innovation. Focusing on the field of biodiversity, biodiversity compensatory cases based on their different features from the officially released typical examples are selected to assess the policies. The result shows that performance of the management of compensatory payments is generally poor, and the indicators of executive efficiency and responsibility fulfillment mostly improve over time, while the performance of the official value criteria indicators of administrative public interest litigation and civil public interest litigation are quite different. From the perspective of types, the characteristics of biodiversity cases related to marine resources are more prominent. From the perspective of time, the indicators of emergency efficiency gradually improve over time. From the perspective of policy stages, good design and implementation of policy can bring good effect. Finally, we also put forward suggestions on promoting and improving the ecological environment damage compensation system in China.

Land use supervision and environmental pollution: multitasking bureaucrats and spillovers across regulations

Abstract This article provides evidence on the strong spillover effects of land use regulations on environmental regulation enforcement in China. We find that the establishment of China’s Land Supervision Bureaus, which effectively reduced land use violations, led to a significant relaxation of environmental regulations by local officials and an increase in cities’ pollution intensity and overall pollution. In addition, the detrimental environmental effects of land use supervision are particularly strong among cities governed by officials with stronger promotion incentives. The results are consistent with a model in which multitasking local officials loosen environmental regulations to meet GDP growth targets in response to reduced industrial land supply. We further support the model by documenting land use supervision’s negative effect on new firm entries but significantly positive effect on incumbent firms’ outputs. (JEL D73, H77, P26, Q53, R52)

Symbol or substance? Environmental regulations and corporate environmental actions decoupling

Our paper focuses on how firms strategically respond to environmental regulations on environmental actions. Given the greater discretion in environmental information disclosure and relaxed environmental regulations enforcement in China, we propose that firms tend to say more while do less to obtain environmental legitimacy, namely corporate environmental actions decoupling. Using a sample of 5422 Chinese firm-year observations over the period of 2012–2018, we document that stringent environmental regulations contribute to a significant inconsistency between environmental reporting and actual environmental performance. Moreover, we demonstrate that this inconsistency is exacerbated when firms possess greater bargaining power and fewer financial resources. Our paper not only advances the understanding of how firms navigate external regulations by examining the tradeoffs between symbolic and substantive actions, but also sheds light on factors influencing decoupling/greenwashing practices from the perspective of government-business relations in China, and potentially in other emerging economies.

China’s recognition and enforcement of foreign securities judgments against overseas-listed Chinese companies

Abstract Over the past decades, a growing number of Chinese companies have been listed overseas, notably in the USA and Hong Kong. They are subject to the securities regulation of listing places and can be sued thereunder against their securities misconduct. As overseas-listed Chinese companies usually have their main assets located in China, it is important that Chinese courts recognize and enforce foreign securities judgments. However, there are many difficulties in this area, which undermine the efficacy of the regulation of cross-border securities transactions. In quest of solutions, this article assesses the possibility of suing Chinese companies in the offshore financial centres where they are incorporated, finding that there would be similar issues with judgment enforcement in China. It also examines the viability of using arbitration as an alternative, arguing that arbitration may only supplement, rather than substituting, court litigation for resolving securities disputes. China should consider signing a bilateral treaty with the USA, clarifying the principle of reciprocity, and ratifying the 2005 Hague Choice of Court Convention and even the 2019 Hague Judgment Convention. Hong Kong is also advised to expand its current judgment recognition arrangement with Mainland China to cover securities judgments and join the relevant international conventions.

Re-exploration of dietary iodine intake in Chinese adult males using a modified iodine balance study.

There is still controversy about optimal dietary iodine intake as the Universal Salt Iodization policy enforcement in China. A modified iodine balance study was thus conducted to explore the suitable iodine intake in Chinese adult males using the iodine overflow hypothesis. In this study, thirty-eight apparently healthy males (19·1 (sd 0·6) years) were recruited and provided with designed diets. After the 14-d iodine depletion, daily iodine intake gradually increased in the 30-d iodine supplementation, consisting of six stages and each of 5 d. All foods and excreta (urine, faeces) were collected to examine daily iodine intake, iodine excretion and the changes of iodine increment in relation to those values at stage 1. The dose-response associations of iodine intake increment with excretion increment were fitted by the mixed effects models, as well as with retention increment. Daily iodine intake and excretion were 16·3 and 54·3 μg/d at stage 1, and iodine intake increment increased from 11·2 μg/d at stage 2 to 118·0 μg/d at stage 6, while excretion increment elevated from 21·5 to 95·0 μg/d. A zero iodine balance was dynamically achieved as 48·0 μg/d of iodine intake. The estimated average requirement and recommended nutrient intake were severally 48·0 and 67·2 μg/d, which could be corresponded to a daily iodine intake of 0·74 and 1·04 μg/kg per d. The results of our study indicate that roughly half of current iodine intakes recommendation could be enough in Chinese adult males, which would be beneficial for the revision of dietary reference intakes.

The Enforcement of Child Custody in China: Dilemma and Solution

Child custody enforcement in China is still controversial, and there are also great differences on some key issues of custody. Lacking clear contents of custody enforcement in adjudicative documents, cognitive biases among judges and inadequate supporting measures have become three major elements which lead to difficulties in enforcement of child custody rights. Therefore, child custody enforcement needs to be improved through: (1) to carry out the concept of modest enforcement, (2) to maximize interests of children in realizing child custody rights, (3) and in the adjudication documents to clearly list out the specific content of enforcing the custody right.

Competition for Exclusivity and Customer Lock-in: Evidence from Copyright Enforcement in China

Competition for Exclusivity and Customer Lock-in: Evidence from Copyright Enforcement in China

How do Chinese judges invoke the constitution? Analysis based on 1907 decisions

Abstract The abolition of the judicial interpretation issued by the Supreme People’s Court of the People’s Republic of China in Qi Yuling’s case marks the end of the trend of developing a judicial constitutional review system in China, but issues of courts invoking constitutional norms in judicial decisions continue to arise. This essay investigates the actual situation of the Constitution in judicial decisions by categorizing 1907 court decisions that invoked the Constitution as the reasoning basis and the court decisions which invoked the Constitution as the decision-making basis and by exploring the logic of the use of the Constitution by Chinese judges. In the absence of a constitutional review system, the primary sense of Chinese judges invoking constitutional norms is characterized by “simplistic reasoning”, “politicized enforcement” and the “parent law” concept. The insufficient judgment reason is a universal feature of judicial adjudication in Chinese courts. However, due to the lack of a constitutional review system, the poor perception of the interpretation and application of the constitution may exacerbate the lack of legal arguments invoked by the Constitution. The political model of Constitution enforcement in China makes judges invoke the Constitution in judicial decisions by “asserting the prestige of the Constitution”, which leads to numerous errors in legal argumentation in judicial decisions. This also reflects the tendency of “political enforcement” to take precedence over the legal enforcement of the Constitution. The influence of the old “parent law” concept is that judges can arbitrarily apply constitutional norms directly to civil cases, including fundamental rights norms. By summarizing and describing the above three features, we can depict the activities of current Chinese courts in invoking the Constitution.

Beyond the campaign‐style enforcement: A consensual approach to bridge the environmental policy implementation gap

AbstractExisting studies on environmental policy implementation in China have largely been focused on the inadequacy of environmental policy implementation at local levels and the adversarial campaign‐style enforcement used to remedy it, while overlooked other approaches to addressing environmental issues. We present a case in which a consensual approach was used to control water pollution and identify key factors contributing to the adoption and success of such an approach. The research unit is the process of water pollution control in Shandong Province from 2002 to 2011. During the case period, the pulp and paper industry (the leading polluting source) was regulated with gradually tightened water pollution discharge standards which were made and implemented in a consensual way, surface water quality was greatly improved, and the economic output of the regulated industry grew rapidly. Key factors contributing to the adoption and success of such an approach include the presence of a capable policy entrepreneur who played an important role in policy innovation, forging consensus building in policy making and facilitating consensual policy implementation; the deep and wide involvement of the regulated firms in the policy making process which allowed them to share know‐how and express preferences; and the strong political support from provincial higher‐ups which signaled strong political wills. The findings enrich our understanding of environmental policy enforcement in China by adding a set of internal factors to a literature pool focusing more on the the influence of such external factors as institutional incentiveson policy processes and outcomes.

Competition Enforcement in Digital Markets in China

Compared with the size of China’s digital market, competition enforcement in China in this area is relatively underexplored. It had been almost an entirely blank space until the end of 2020. This article summarizes the enforcement actions that have been taken to date, from few distant cases in which former authorities tentatively approached competition issues in this area, to more recent landmark cases in which more sophisticated analysis is provided and hefty fines are imposed. This article traces the enforcement history, thereby explaining the reasons of some China-featured situations, for example, a large amount of existing gun-jumping cases. It also studies some comparable enforcement decisions with a common issue, for example, dominance abuse in the digital market and a controversial topic in China—“choose one from two.” Enforcement trends are also discussed to predict future development in this regard.