Propensity Score Matching-difference In Difference Research Articles

Impact of Resource-Saving and Environment-Friendly Society Construction on Sustainability

Promoting coordinated and environmentally sustainable development of the Chinese economy is one of the primary tasks at the moment, as well as one of the sustainable development goals of the United Nations. The Resource-saving and Environment-friendly Society (RES) has created a pilot promotion policy aimed at China, with the goal of supporting the sustainable development of economic production activities while preserving natural ecosystems. In this investigation, we used the global Malmquist–Luenberger index with a slack-based measure of the directional distance function to calculate the industrial green total factor productivity (IGTFP) of 105 prefecture-level cities along the Yangtze River from 2004 to 2019; IGTFP was used as a proxy for sustainable development. Then, by considering the RES construction as a quasi-natural experiment, we used propensity score matching difference-in-differences (PSM-DID) to determine the effect of RES construction on sustainable development of the Yangtze River economic belt. We also employed the mediating effect model and triple difference (DDD) model to further analyze the mechanisms underlying the heterogeneous impacts of different urban characteristics. The results revealed three key findings. (1) According to the IGTFP calculation results, RES construction can effectively promote green technological progress while inhibiting green technological efficiency. (2) After carrying out a series of robustness tests, we found that RES construction increased the IGTFP of pilot cities by 4%, indicating that RES construction can significantly promote the sustainable development of pilot cities along the Yangtze River. (3) The results of the mechanism analysis showed that RES construction had a significantly positive impact on sustainable development through technological innovation, human capital, energy conservation, and emission control. In terms of different urban characteristics, the RES construction promoted sustainable development in first-tier cities, second-tier cities, and resource-based cities. We summarized the practical experience of the RES construction as a typical pilot promotion policy. It provides an empirical basis for planning the construction of eco-friendly urban areas in the 21st century and responding to the international community’s sustainable development goals from a Chinese perspective.

How does the low-carbon city pilot policy affect the synergistic governance efficiency of carbon and smog? Quasi-experimental evidence from China

In the context of the increasingly significant constraints of climate change and smog pollution on high-quality economic development in China, it is important to explore the impact of a low-carbon city pilot (LCCP) policies on the synergistic governance efficiency of carbon and smog (SGECS) for the realization of controlling peak carbon emissions and ensuring better air quality (“dual goals”). Based on the panel data of 216 cities in China from 2008 to 2018, the difference-in-difference (DID), propensity score matching-difference-in-difference (PSM-DID), and spatial difference-in-difference (SDID) methods are adopted to study the impact of LCCP on the SGECS. The study shows that 1) LCCP policies can significantly improve the SGECS, but the effect is not long-term and lasting. 2) Regarding the mechanism of action, LCCP policies can improve the SGECS by reducing energy consumption intensities and optimizing the industrial structure, but the mechanism of green technology innovation has not been effectively verified. 3) Regarding the extended analysis, LCCP policies have a more significant role in improving the SGECS in eastern and western cities and in cities with high levels of human and material resources. 4) Regarding the spatial spillover effects, LCCP policies have overall improvement effects on the SGECS in neighboring regions. However, the promotion effects of LCCP policies on the SGECS are mainly realized through the “competition for the top” among the pilot cities. The spatial spillover effect of the impact of LCCP policies on the SGECS gradually weakens with increasing geographical distance.

Municipal amalgamations and the quality of public services: A study based on city-county mergers in China.

Municipal amalgamation is one of the core policy tools for Chinese government intervention in urbanization. The city-county merger policy provides a valuable research object for examining whether government-led urban expansion improves the quality of public services. By using city panel data from 2003 to 2019, this paper examines the policy effects of city-county mergers on the quality of public services using the Propensity Score Matching-Difference-in-Differences (PSM-DID) model. The results indicate that, after controlling for other factors, city-county mergers have increased the quality of public services by 1.2%. A placebo test has validated the robustness of this positive effect. Through further tests, the paper finds that the policy has positively affected all three aspects of the quality of public services in China: education, health care, and transport infrastructure, with the greatest impact being on education. Using a case study of a city-county merger in the Fenghua District of Ningbo, this paper depicts the transmission mechanism and argues that the policy affects the quality of public services by providing institutional security (financial and administrative power) and promoting regional integration in the new city area.

The impact of green credit policy on enterprises' financing behavior: Evidence from Chinese heavily-polluting listed companies

The enterprise's financing response to the green credit policy is of great significance. It is related to whether green finance can successfully accelerate enterprises' technological upgrading and transformation. Based on Propensity Score Matching-Difference in Difference (PSM-DID) model, this paper studies the impact of green credit policy on financing behavior of the heavily-polluting listed companies in China from 2008 to 2020. The results show that the illiquid debt financing behavior of heavily-polluting enterprises has a clear downward trend since China's "Green Credit Guidelines" were implemented, while liquid debt and commercial credit, as alternative financing methods for enterprises, have increased significantly. Through further analysis, we found that state-owned enterprises (SOE) are more affected by green credit policy than non-state-owned enterprises (NSOE), and companies in regions with a lower green development index are more affected by green credit policy than companies in higher green developing regions. Although China's green credit policy has a certain inhibitory effect on the illiquid debts financing behavior of heavily-polluting enterprises, it has failed to allocate the capital flow effectively due to the firm-level alternative financing response to the green credit policy. From the managerial significance of the policy, the signal guidance of green finance needs to be strengthened for enterprises. • Explore the impact on financing behavior of green credit policy. • Green credit policy is effective in reducing the illiquid debt of heavily-polluting enterprises. • Green credit policy has led to an increase in alternative financing for enterprises. • Explore the impact of green credit policies on different green development index regions.

Has the Opening of High-Speed Rail Promoted the Balanced Development between Cities?—Evidence of Commercial and Residential Use Land Prices in China

The impact of high-speed rail (the following text is written as HSR) on regional economy has become an important research hotspot in the world. Using the Difference in Differences (DID) method, this paper analyzes the influence of HSR opening in 223 cities from 2011 to 2018, considering the time delay effect of HSR opening. After the Propensity Score Matching Difference in Differences (PSM-DID) method and counterfactual regression for robustness test, and we analyzed the mechanism of the urban resident population and financial activities; the results show that: (1) The impact of HSR opening on residential land price is more positive than commercial use land price. (2) For residential land price, the opening of HSR has a greater positive effect on the land in urban areas. (3) The HSR has a more significant impact on the price of residential land in high-tier (second-tier and first-tier) cities, especially on urban area in first-tier cities (including new first-tier cities), and then their city area, followed by second-tier cities. (4) In addition to the impact starting time first, the impact coefficient of HSR on the land price in high-tier cities is higher than that in low-tier cities. (5) From the perspective of residential land price, within 5 years from opening, HSR plays a constant role in developed cities’ economy.

Effect of Science and Technology Finance Policy on Urban Green Development in China

Green sustainable development is a major challenge faced by countries worldwide. Against the strategic background of innovation-driven development, studying the impact of science and technology finance policy (STFP) on urban green development is of great practical significance. Based on urban panel data from 2003 to 2019, this study systematically examines whether and how STFP affects urban green development in China using the difference-in-differences (DID) method. The empirical results show that STFP has significantly stimulated the urban green development level, and the effect of policy implementation has increased first and then decreased over time. The findings remain robust when using propensity score matching DID to avoid selection bias and other factors that may interfere with the estimation results. Additionally, technological innovation and green innovation are essential channels for STFP to improve urban green development. The impact of STFP is found to vary by region and by the level of urban innovation. Specifically, the policy effect is more pronounced in midwestern and high-innovation cities but less obvious in eastern and low-innovation cities. In conclusion, this study provides city-level empirical evidence from China for an in-depth understanding of the green economy effect of STFP. It also provides theoretical guidance and policy references for accelerating the green transition in the context of sustainable development.

Central environmental protection inspection and green technology innovation: empirical analysis based on the mechanism and spatial spillover effects.

In this study, the central environmental protection inspection (CEPI) policy is considered a quasi-natural experiment. Based on the data of 216 Chinese cities from 2008 to 2018, the influence of CEPI on green technology innovation (GTI) is empirically examined mainly using difference-in-differences (DIDs), propensity score matching DID and spatial DID methods. The results indicate that CEPI can effectively promote GTI. Regarding different types of GTI, CEPI mainly promoted utilitarian GTI. Regarding the mechanism, CEPI significantly promotes local GTI mainly through the increase of environmental protection expenditure and research and development investment. Considering the dynamic marginal effect, CEPI starts to significantly promote GTI in the second year after the policy implementation but exhibited no effects in the third year. The extended study shows that GTI effect of CEPI only occurs in small-medium cities and big cities. Furthermore, there is a certain beggar-thy-neighbor effect between inspected and uninspected cities. Finally, the spatial decomposition of CEPI effects shows that the inhibitory effect of CEPI on GTI mainly occurs in the neighboring uninspected cities, while CEPI has no evident inhibition on GTI in neighboring inspected cities.

Impact of Resource-Based Economic Transformation Policy on Sulfur Dioxide Emissions: A Case Study of Shanxi Province

Air pollution, particularly SO2 emission, has become a global problem, seriously threatening the sustainable development and health of mankind. Based on the panel data of 248 prefecture-level cities in China during 2003–2018, this study used the Propensity Score Matching-Difference in Difference (PSM-DID) method within the counterfactual framework to evaluate the treatment effect of the policy made by the National Resource-Based Economic Transformation Comprehensive Supporting Reform Pilot Zone (CRZ) on sulfur dioxide (SO2) emissions. The results show the following. (1) The benchmark regression results demonstrate that the CRZ policy has significantly decreased per capita SO2 emissions (PCSO2) and SO2 emissions per unit of GDP (PGSO2) in the pilot zone, and the placebo test indicates that the evaluation of the policy effect is robust. (2) The dynamic effect test indicates that there is a lag in the effect of the CRZ policy on reducing SO2 emissions. The policy effect of the CRZ policy on PCSO2 and PGSO2 was not obvious in the first stage (2011–2015), the CRZ policy significantly reduced the PCSO2 and PGSO2 in the second stage of policy implementation (2016 and beyond), and the reduction effect of CRZ policy on SO2 emissions is increasing over time. (3) The mechanism analysis shows that optimizing industrial structure, increasing human capital, strengthening technological innovation, and expanding opening to the outside world are the main ways for the CRZ policy to reduce SO2 emissions. The study will help promote SO2 emissions reduction in Shanxi Province, providing a reference for the transformation and development of other resource-based cities in China and the world and contributing to accelerating the achievement of regional emission reduction targets and sustainable development.

The effect of China's carbon emission trading on eco-efficiency: an empirical study at the city level.

Carbon emission trading has been actively applied in many countries, and its operational effect has received widespread attention. However, previous studies mostly focused on single environmental effect, and the investigation of the comprehensive environmental effect needs to be further supplemented. Based on this, this paper explores the comprehensive environmental effect of carbon emission trading with eco-efficiency as the starting point. First, this paper measures eco-efficiency using the super-efficient minimum distance to strong efficient frontier (MinDS) model with undesirable outputs. Second, this paper uses the propensity score matching difference in difference (PSM-DID) model to quantify the effect of carbon emission trading on eco-efficiency. Finally, this paper examines the mediating mechanism of the effect of carbon emission trading on eco-efficiency based on the mediating effect model. The results show that carbon emission trading can improve the level of urban eco-efficiency. Energy savings and increased efficiency effectively mediate the promoting effect of carbon emission trading on eco-efficiency. The mediating push effect of R&D innovation and industrial structure restructuring has not yet appeared. This paper can not only provide policy basis for the improvement of carbon emission trading market but also provide reference for the construction of carbon emission trading market in developing countries.

Can Sci-Tech Finance Pilot Policies Reduce Carbon Emissions? Evidence From 252 Cities in China

It is widely believed that science and technology (sci-tech) finance can pave the way to combat environmental degradation by promoting innovation in environment-related technologies. However, limited research is available to support this argument, and literature is silent on how sci-tech finance pilot policies influence carbon emissions in China. Therefore, this study investigates the impact of technology and financial integration pilot policy (TFIP) on carbon emissions and its dynamic effects, heterogeneity, and mechanisms in 252 cities in China. To do this, the yearly data from 2006 to 2019 were used in the propensity score matching–difference in differences (PSM-DID) method. The results unveiled that 1) the TFIP can effectively reduce the scale and intensity of carbon emissions in pilot cities. The TFIP shows a U-shaped distribution with CO2_Size and CO2_intensity, reaching a minimum in the fifth year. The TFIP has a lagging effect on carbon emissions, which significantly reduces carbon emissions in the second year. The robustness test verifies our conclusion. 2) The heterogeneity test results show that the effect of the TFIP is heterogeneous depending on the spatial and city attributes. The TFIP can effectively reduce carbon emissions in the eastern region and resource-based cities. However, in the central, western, and non-resource–based cities, the reduction effect of the TFIP is not obvious. 3) The impact mechanism finds that the TFIP reduces the scale of carbon emissions by enhancing the green innovation capacity and rationalizing the production structure in the pilot cities. Several policy recommendations are proposed based on the findings such as vigorous development of sci-tech finance to achieve sustainable development of the economy.

처치집단에 대한 평균 처치 효과의 준모수적 추정

In this study, Abadie(2005)’s semiparametric difference-in-difference(DID) and propensity score matching DID methods are implemented to estimate the average treatment effect on the treated(ATET) of the Anti-Graft Act on the expenditure on congratulations and condolences(ECC). Both approaches are semiparametric since they do not require a specific functional form specification of the outcome variable. By following Abadie(2005), the ATET can be estimated by using observed outcomes at before and after policy intervention, treatment indicator and propensity score of all observations. On the other hand, the propensity score matching DID is a very intuitive method to estimate ATET since it can find a counterfactual control for each treated unit. Abadie’s semiparametric DID estimate is -0.06 while the propensity score matching estimate is -0.12. However, the statistical significance is found only in the latter estimation result. It implies that the treatment group are expected to reduce the expenditure on congratulations and condolences by 12.8 percent less than the control group if the control group would be exposed to the treatment.

Can sustainable development policy reduce carbon emissions? Empirical evidence from resource-based cities in China

Resource-based cities (RBCs) have made outstanding contributions to China's social and economic development over recent decades. Nevertheless, with the worsening climate change and the exhausted resources, how to curb carbon emissions of RBCs to deliver their low-carbon transformation is becoming a problem plaguing the world. To facilitate the low-carbon transformation of RBCs, the Chinese government has formulated many policies, including the Sustainable Development Policy of National Resource-based Cities, 2013–2020 (SDPRC). However, the implementation of SDPRC has not yielded a clear environmental influence. Therefore, this study employs the Propensity Score Matching-Difference in Difference to investigate this influence based on the panel data of 285 prefecture-level cities from 2006 to 2017 while exploring the related heterogeneity and impact mechanisms. It is found that: (1) the implementation of SDPRC has significantly reduced carbon emissions and intensities of RBCs, with this effect becoming more conspicuous with the advancement of the policy. A robust test also verifies these findings. (2) Results from the heterogeneity test demonstrate that the implementation of SDPRC has imposed a suppressive effect on CO2 emissions in eastern, central, and western Chinese regions, especially pronounced in the latter two regions. Except for the growing cities, which are not significantly affected by the policy, the other three types of cities have seen a catalytic effect on CO2 emission reduction from the implementation of the policy, with the most significant impact observed in the declining cities. (3) Analyses of related mechanisms reveal that thanks to the implementation of SDPRC, RBCs suppress CO2 emissions mainly by optimizing their industrial structures and relieving their energy intensities. Finally, some policy recommendations are proposed based on the findings of this study to facilitate the low-carbon transformation of RBCs.

Study on the Emission Reduction Effect and Spatial Difference of Carbon Emission Trading Policy in China

To cope with huge carbon emission pressure, China has implemented a carbon emissions trading pilot policy that aims to provide reasonable suggestions for the smooth operation of the national carbon market. This paper selects the provincial panel data in China from 2005 to 2019 and uses the propensity score matching-difference in difference (PSM-DID) method to evaluate the carbon emission policy’s reduction effect. Based on carbon emissions (CE) and carbon emission intensity (CI), provinces and cities are divided into four regions, and each region is verified by spatial difference analysis. Furthermore, the mediating effects of carbon emission reduction through the dual aspects of technological progress and industry structure are also discussed. Results verified that, (1) under the carbon emission trading policy, regional carbon emissions and carbon emission intensity are both significantly reduced. (2) Technological progress helps to reduce carbon emissions, while industrial structure shows no obvious contribution. (3) The four regions all show ideal emission reduction effects, of which the High CE-High CI region shows the best, but is greatly restricted by techniques. The industrial structure of the High CE-Low CI region needs to be further optimized for carbon reduction. In the Low CE-High CI region, the carbon emissions brought by economic development fail to effectively improve per capita GDP. The Low CE-Low CI region contributes greatly to carbon emission reduction with technical advantages.

Migrating to Global Reporting Initiative Guidelines: Does International Harmonization of CSR Information Pay?

AbstractThousands of organizations worldwide currently use the Global Reporting Initiative (GRI) standards to report on sustainability information. We use data from 39 countries over the 2010–2018 period to examine the incremental value relevance of the international harmonization of corporate social responsibility (CSR) disclosure. A propensity score matching–difference in differences (PSM‐DID) research design was used to avoid selection bias and endogeneity concerns. We find that migrating to the GRI guidelines destroys firm value. This relationship is stronger for firms with poor CSR performance, which suggests that market players, particularly institutional investors, consider GRI migration as a cost driver – at least in the short term. The introduction of other potentially confounding institutional factors highlights the effectiveness of the negative relationship between firm value and GRI migration for countries with more opaque financial markets and less sustainable business environments. Our findings have several implications for policymakers, academics and practitioners in understanding both the motivations and the consequences of CSR harmonization reporting on financial markets.

Agricultural trade liberalization and domestic fertilizer use: Evidence from China-ASEAN free trade agreement

The China-ASEAN (Association of Southeast Asian Nations) Free Trade Agreement (CAFTA) has been recognized as a significant progress in regional economic integration for member countries. While the existing literature has widely studied the trade effects of Free Trade Agreements (FTAs), it remains unclear how it affects environment-related input use. This paper examines the impacts of agricultural trade liberalization on the domestic fertilizer use following the CAFTA. Using a combined dataset consisting of country- and product-level fertilizer use and predictors over the period 1995–2015, this paper empirically examines the impact of CAFTA on the domestic fertilizer use for the exported fresh fruits and vegetables (FFV) from China to ASEAN members. We use the synthesis control method to identify the aggregate impacts of CAFTA on the domestic fertilizer use, followed by the propensity score matching difference-in-difference (PSM-DID) method to examine the mechanism through which fertilizer use is increased. We find that the total volumes of the domestic fertilizer use for Chinese exported FFV increased significantly following the implementation of the Early Harvest Program under CAFTA in 2004. This impact is more evident for exports to the initial ASEAN members compared to the new members. The PSM-DID results suggest that CAFTA increased the degree of export concentration on ASEAN members. The evidence is consistent with the export diversion effect of a customs union instead of the export creation effect due to trade liberalization.

Carbon Emission Reduction Effects of Green Credit Policies: Empirical Evidence From China

This paper employs the Green Credit Guidelines as green financial policy to investigate whether the implementation of green credit has contributed to the low-carbon economic development. The difference-in-differences method (DID) is then applied to estimate the emission reduction effects. The paper found that green financial policy has effectively reduced pollution and energy consumption in high pollution and high energy consuming industries. As a means of verifying the reliability of the results, propensity score matching difference-in-differences (PSM-DID) applies the match kernels and radius method before the DID. Furthermore, this paper explored the regional and industry heterogeneity in incremental carbon emission reductions. This is the first paper to use Guidelines to measure green finance, in order to achieve indicator innovation and provide corresponding policy advice. To reduce carbon emissions, the government must strengthen the implementation of green credit policy and create a green financial environment tailored to local needs.

A study of low-carbon development, urban innovation and industrial structure upgrading in China

Abstract This paper, based on the panel data of 281 prefecture-level cities in China, applies the difference-in-differences (DID) approach and the propensity score matching DID (PSM-DID) approach to an empirical study on the impacts of the low-carbon pilot program on industrial structure. It concludes that the program has contributed significantly to more rational industrial structures of pilot areas. The study shows that pilot areas have more rational industrial structures than non-pilot areas, recording an increase of 0.058 units in average rational level. This conclusion holds under various robustness tests. Further heterogeneity analysis suggests that the low-carbon pilot program has notably boosted the rational levels of industrial structures of cities in central China and small cities, while less so for other parts of China or other larger cities. Mechanism test shows that low-carbon cities have realized industrial structure upgrading by facilitating urban innovation. In light of this, the low-carbon pilot program should be further put in place steadily with a focus on tailoring pilot policies to local conditions and enhancing their economic adaptability. The role of the program in optimizing industrial structure should be fully leveraged to effectively add to efforts in actively exploring green, low-carbon sustainable development of economy and pulling off the transformation of both economic structure and energy mix.

Robot adoption and energy performance: Evidence from Chinese industrial firms

With the continuous development of technology, intelligent production, which brings huge changes to social welfare, has gradually become the main trend in the economic development of many countries. Does intelligent production featuring robot adoption help improve the environment and solve energy problems? In this study, we first construct a theoretical model at the micro-level to analyze how robot adoption affects a firm’s energy efficiency. Then, based on Propensity Score Matching-Difference in Differences (PSM-DID) method, we use the data of China’s firms from 2001 to 2012 to identify the causal relationship between robot adoption and firm’s energy efficiency. We find that the adoption of robots in production can significantly increase firms’ energy efficiency. Further mechanism tests show that the increase of productivity is an important factor through which adopting robots can improve a firm’s energy efficiency. In addition, the increase in the firm’s energy efficiency is mainly due to the increase in the firm’s output rather than the decrease in total energy consumption. Altogether, this study provides the first micro evidence on the relationship between robot adoption and energy efficiency, providing significant implications for the world’s sustainable development.

Environmental regulation and corporate tax avoidance-Evidence from China.

In this study, we used a difference-in-difference (DID) approach to analyze the effect of environmental regulation on corporate tax avoidance behavior based on China's carbon emissions trading pilot policy of 2013. Our findings were as follows: (1) Environmental regulation has led companies to adopt further tax evasion behaviors. Furthermore, the core conclusion was confirmed after a series of robust and endogenous tests, such as parallel trends and PSM-DID (propensity score matching-difference-in-difference). (2) Environmental regulations increase tax avoidance activities by reducing corporate cash flows. (3) The influence of environmental regulation on firm tax evasion is highly pronounced among non-state-owned enterprises, big-scale enterprises, and enterprises with a high degree of industry competition.

Can the Target Responsibility System of Air Pollution Control Achieve a Win-Win Situation of Pollution Reduction and Efficiency Enhancement?

Whether the environmental target responsibility system, a typical mandatory environmental regulation, can realize the coordinated development of environmental protection and economic growth has attracted widespread attention. With the difference-in-differences (DID) method, this paper utilizes a policy, “China’s Key Cities for Air Pollution Control to Meet the Standards within the Time Limit (APCMS),” as a quasi-natural experiment to empirically examine the target responsibility system of air pollution control’s effect on both firms’ pollutant emissions and their total factor productivity (TFP). The corresponding mechanisms are also investigated. The results show: 1) The policy not only significantly decreases firms’ pollutant emissions, but also improves their TFP. The results are robust to the exclusion of the impact of other policies in the same period, propensity score matching DID (PSM-DID) test, the adoption of alternative dependent variables, and altering sample interval; 2) The dynamic analysis shows that the policy effect on reducing pollutant emissions has increased over years after a lag of 2 years; 3) The policy reduces pollutant emissions mainly through stimulating the internal innovation rather than end-pipe treatment or production cuts. 4) Capital-intensive and private firms and firms in regions with a high degree of marketization or strong environmental law enforcement are found more responsive to the environmental target responsibility system.