Quasi-natural Experiment In China Research Articles

Does environmental public interest litigation improve the urban land green use efficiency?-Evidence from a quasi-natural experiment in China.

Environmental public interest litigation (EPIL) is a significant part of the judicial system; it is aimed at strengthening judicial protections and safeguarding public interests. Based on the quasi-natural experimental setting of China's EPIL pilot project, this study examines the impact of EPIL on the country's urban land green use efficiency (ULGUE). The findings show that effectively implementing EPIL enhances ULGUE. Specifically, this policy has led to a 6.6% increase in ULGUE in pilot cities, and its impact has grown stronger over time. Mechanism analysis results show that EPIL mainly enhances ULGUE by strengthening environmental supervision and law enforcement, by increasing public participation in environmental governance, and by promoting green innovation and industrial structure upgrades. Furthermore, heterogeneity analysis revealed that the positive effects of this policy implementation are more pronounced in resource-based cities, cities with open environmental information, and cities with high marketization. This paper provides empirical evidence for the effectiveness of environmental governance via EPIL.

Impact of regulating political connections on employee welfare attitude: Evidence from China

We investigated how regulating political connections affects firms’ employee welfare attitudes using a quasi-natural experiment in China. We find that the depoliticization regulation negatively impacts employee welfare attitudes toward firm staff benefits, but positively impact welfare attitudes toward firm humanistic care. Furthermore, we find that the SOEs’ employee welfare attitude regarding staff benefits is profoundly reduced; the effect of regulating political connections on welfare attitudes toward firms’ humanistic care is particularly effective for non-SOEs. Additionally, the impact of regulating political connections on employees’ welfare attitudes is particularly profound for firms in the manufacturing sector. Moreover, our empirical results indicate that the impact of regulating political connections on employee welfare attitudes is significant, particularly for firms experiencing financial constraints. Firms located in neither left- nor right-leaning regions seem to form the most affected group. Finally, the weakening of firms’ political connections has resulted in a decline of corporate wage differentials.

Bank liability structure and corporate employment: Evidence from a quasi-natural experiment in China

We examine how bank liability structure affects firms' hiring decisions. To identify causality, we utilize the 2014 interbank borrowing reform that has different impacts on national and regional banks as an exogenous shock. Particularly, we construct the exposure of firms to this reform and then run a difference-in-differences regression. The results show that an increase in banks' deposit funds promotes corporate employment, and the number of total employees on average increases by 4.4%. Further mechanism tests find that banks provide more loans and firms obtain more access to bank credit, confirming the credit constraints channel. Moreover, the corporate employment promotion effect is stronger when financial constraints, information disclosure quality and labor intensity are higher. In addition, firms' employee composition and average wage paid to workers do not change, while their productivity and production scale increase. Overall, our evidence highlights the active role of regulating banks' interbank borrowing in stabilizing social employment.

Can an Energy Transition Strategy Induce Urban Green Innovation? Evidence from a Quasi-Natural Experiment in China

Green innovation is a new driving force to promote green and low-carbon development. Whether an energy transition strategy can induce green innovation is an important question that has not been clearly answered. With the help of panel data from 281 cities in China during 2007–2021, this study considers China’s new energy exemplary city policy as a quasi-natural experiment and conducts a difference-in-differences model to explore the effects and mechanisms of energy transition strategy on urban green innovation. The results show that a new energy exemplary city effectively induces urban green innovation, with mediating mechanisms of increasing government financial support, promoting human capital agglomeration, and improving energy efficiency. The moderating mechanisms test reveals that environmental regulation and intellectual property protection play a positive moderating role in the promotion of green innovation through the new energy exemplary city policy. Heterogeneity analysis suggests that the new energy exemplary city policy has a stronger effect on promoting green innovation in eastern regions and non-resource-based cities. Our findings not only enrich our understanding of the relationship between energy transition strategy and green innovation but also provide a reference for policymakers to promote energy transition and green innovation.

Can low-carbon city pilot policies improve urban energy efficiency? evidence from a quasi-natural experiment in China

In the context of global efforts to alleviate climate change, this study focuses on investigating the significance and impact of low-carbon city pilot policies (LCCPP), a key strategy in the reduction of greenhouse gas emissions. Drawing on data from prefecture-level cities spanning 2004 to 2019, the study explores the potential of LCCPP in enhancing green total factor energy efficiency (GTFEE) employing a multitemporal Difference-in-Differences (DID) model and examines its transmission mechanisms. First, LCCPP is shown to be effective in enhancing GTFEE. Second, heterogeneity testing indicates that the impact of LCCPP on GTFEE is more pronounced in “two control zones”, namely, in developing and mature resource cities. Third, industrial restructuring is identified as the key mechanism through which LCCPP influences GTFEE.

Can green finance policy promote ecosystem product value realization? Evidence from a quasi-natural experiment in China

This study takes the Green Finance Pilot Zones (GFPZ) policy in China as a quasi-natural experiment and employs the synthetic control method to test the policy effect of GFPZ on ecosystem product value realization, using the province-level gross ecosystem product (GEP) panel data from 2011 to 2020. The results reveal that GFPZ significantly promotes the value realization of ecosystem products, this positive impact remains robust after the test of spatial placebo studies, leave-one-out estimation, difference-in-differences (DID) method, and controlling the effects of other policy impacts. Meanwhile, the ecological transformation of industries and ecological industry development serves as the critical mechanism pathways for GFPZ to realize the value of ecosystem products. In addition, we identify significant spatial spillover effects resulting from GFPZ implementation. Heterogeneity analysis reveals that the impact of the GFPZ policy on ecosystem product value realization is more significant in the central, the western regions, and the areas with high financial development levels. Moreover, for heterogeneous policy goals, GFPZ has greater policy impacts in ecologically vulnerable regions, followed by industrial upgrading regions, while the impact on the resource development region is not significant. These findings provide empirical evidence on the attributions of green finance policy to sustainable development and underscore the pressing need for enhancing the effective adaptation of green finance policy to local circumstances, making full use of green finance tools to promote ecosystem product value realization and advance sustainable development.

Promoting Urban Innovation through Smart Cities: Evidence from a Quasi-Natural Experiment in China

It is of great theoretical and practical significance to investigate the influence of intelligent city construction on urban innovation. Based on the data of 238 cities in China from 2006 to 2019, this paper utilizes the staggered difference-in-differences (staggered DID) model and the mediating effect model to examine the impact and mechanisms of smart city construction on urban innovation. We find that China’s smart city pilot policies significantly promote urban innovation. Mechanism analysis shows that this innovation promotion effect acts through improving urban informatization, government financial expenditure on science and technology, and the upgrading of the city’s industrial structure. Further analysis shows that smart city construction has a stronger promoting effect on innovation in cities of a larger scale, that located in the eastern region, and have a lower level of science and education. Overall, our findings provide new insights into urban innovation and objectively assess the impact of smart city construction in China.

Bankruptcy judicial system reform and corporate financial litigation risk: A quasi-natural experiment in China

The topics of laws and finance have attracted widespread academic interest. We investigate whether and how bankruptcy judicial system reform affects corporate financial litigation risk using the unique litigation data disclosed by Chinese listed companies. The results show that the bankruptcy judicial system reform positively reduces the corporate risk of being sued in financial disputes. Further research shows that the association between bankruptcy judicial system reforms and corporate financial litigation risk is more pronounced for firms with greater economic policy uncertainty and market competition. We also find that the bankruptcy judicial system reform increases the threat of bankruptcy, thus stimulating corporations to implement steady business strategies and increase their cash holdings. These measures reduce the risk of corporate financial litigation. This study emphasizes the role of the bankruptcy judicial system reform in regulating the behavior of listed companies.

Environmental Protection tax and diversified transition of heavily polluting enterprises: Evidence from a quasi-natural experiment in China

A comprehensive evaluation of the impact of green taxes on enterprises contributes to expediting the economic transition towards environmental sustainability. This study explores the effect of environmental protection tax (EPT) on corporate diversification by leveraging the quasi-natural experiment of EPT law implementation in China. Empirical evidence reveals that, compared to non-heavily polluting enterprises, EPT increases the level of diversification of heavily polluting enterprises by affecting corporate profitability, debt capacity, and risk. Moreover, this facilitative influence is notably pronounced among non-state-owned enterprises (non-SOEs) and enterprises operating within intensely competitive environments. Further analysis shows that diversification helps heavily polluting enterprises shift to green. This transition has benefits for companies in terms of environmental penalties and operational flexibility, which improves firm viability. From the perspective of corporate diversification, this research enhances our understanding of the influence of green taxes, thus providing empirical evidence for evaluating the effectiveness of EPT.

Low-carbon cities pilot and industrial structure upgrading: enabling or negative? Evidence from a quasi-natural experiment in China

The enhancement of industrial structural refinement stands as a pivotal approach to harmonize high-quality economic development and environmental preservation. In this study, we seek to assess the impact of low-carbon city pilot programs on the upgrading of industrial structure. Leveraging panel data encompassing 283 prefecture-level cities in China from 2006 to 2019, this study undertakes an empirical test employing the time-varying difference in difference (DID) methodology. We further delve into an examination of the specific mechanisms and heterogeneity of effects. The findings are summarized as follows: (1) the low-carbon cities pilot significantly promoted the supererogation of industrial structure, but did not promote the rationalization of industrial structure. This observation remains valid even after undergoing a battery of robustness tests. (2) The pilot propels the upgrading of industrial structure by fostering green technology innovation and diminishing resource dependence. Local government support positively moderates the effect of green technology innovation on industrial structure supererogation, while negatively moderating the effect of green technology innovation on industrial structure rationalization. Further tests reveal that local government support can positively moderate the mediating effect of green technology innovation. (3) The policy effect of the pilot is more conspicuous in the eastern region, which is mainly achieved via increasing the intensity of green technology innovation and reducing resource dependence. (4) The pilot exhibits a more pronounced driving effect on the industrial structure of high-level cities, primarily through the promotion of green technology innovation. These findings not only provide empirical evidence for the industry-driven effect of low-carbon cities, enriching the effect assessment research of low-carbon city pilot policies from the theoretical level, but also furnish policy reference for realizing the green and high-quality economic development of low-carbon cities from the practical perspective.

Does a reduction in the pension insurance contribution ratio promote firm productivity? Evidence from a quasinatural experiment in China

AbstractReducing the burden of social security contributions for firms, unleashing their vitality, and enhancing their total factor productivity (TFP) are crucial measures in China's pursuit of sustainable and high‐value‐added growth. This article utilizes three reductions in the corporate pension insurance contribution ratio in China as a quasi‐natural experiment to construct a treatment intensity DID (Difference‐in‐Differences) model. By utilizing data from listed companies between 2013 and 2020, this study empirically examines the impact of reducing the pension insurance contribution ratio on firms’ TFP while identifying the underlying mechanisms. The findings of the study are as follows: First, the policy exhibits a significant positive effect on corporate TFP in China. Second, this policy's contribution primarily stems from stimulating firms to increase their employment of highly skilled labour, elevating wages for ordinary employees, and enhancing firm investment efficiency. Lastly, the analysis of heterogeneity demonstrates that the policy's positive effect is more pronounced among non‐state‐owned enterprises, small and medium‐sized enterprises, and labour‐intensive enterprises. This study provides empirical evidence for evaluating the contribution reduction policy and serves as a policy reference for endeavours to deepen the reform of the pension insurance system and enhance pension insurance fund budget management.

Study on the impact of central environmental protection inspection on the health of the older adult population-A quasi-natural experiment in China.

In 2015, the central government of China established the Central Environmental Protection Inspection (CEPI) system for oversight of local governments. It enhanced local government enforcement of environmental regulations, which had a considerable influence on the health of the local older adult population. This study quantifies the effects of local government regulation brought about by CEPI on the health of the older adult. It examines the impact mechanism using the DID model and panel data from the China Health and Retirement Longitudinal Study (CHARLS). The results show that (1) local governments' environmental protection regulations implemented by CEPI have a positive impact on the general health of the older adult. The results of the study passed the parallel trend test, PSM test, replacement variable test, and placebo test and remained significant; (2) in terms of the impact mechanism, CEPI has promoted local governments' environmental governance initiatives, which has reduced industrial wastewater emissions, industrial sulfur dioxide emissions, and industrial fumes emissions. This has improved air quality, thereby creating a good living environment for the older adult and improving their overall health; (3) according to heterogeneity research, the health of older adult living in the Yangtze River Basin, urban older adult, and older adult without chronic diseases is more significantly affected by the environmental protection regulations of the local governments brought about by CEPI.

Does the carbon emission trading pilot policy promote green innovation cooperation? Evidence from a quasi-natural experiment in China

Green and low carbon transition is a broad and profound economic and social systematic change. Green innovation is a critical way to promote energy saving and emission reduction. Has China continuously promoted a carbon emission trading policy to significantly promote green innovation cooperation? Taking the implementation of the carbon emission trading pilot policy as a “quasi-natural experiment,” this study answers this question by exploring the impact of the policy on green innovation cooperation. Based on data on 274 cities from 2008 to 2020, the multi-time difference-in-differences model is used to evaluate the impact of the policy on green innovation cooperation. The results reveal that the carbon emission trading pilot policy significantly improved inter- and intra-city green innovation cooperation through the upgrading effect of industrial structure and the coverage effect of digital finance compared with the non-pilot cities at the city level. In addition, there are significant differences in the policy effects among cities with different degrees of openness to the outside world and command-and-control environmental regulation.

The effect of margin-trading and short-selling mechanism on left-tail risk: Evidence from a quasi-natural experiment in China

This research investigates the influence of a margin-trading and short-selling pilot program on the left-tail risk of equities, utilizing A-share stock data in China from January 2004 to July 2020 as a sample. By exploiting the staggered implementation of the pilot program within a difference-in-differences framework, we examine the impact of margin-trading and short-selling mechanism on left-tail risks of equities in China. Firstly, we present empirical evidence that the introduction of margin-trading and short-selling mechanism can significantly mitigate the left-tail risk for the designated stocks. In particular, the effect is mainly from short-selling activities. Secondly, the empirical evidence suggests that the presence of information asymmetry among investors plays a mediating role in the mitigating impact. Thirdly, the findings demonstrate that mitigating effect of the mechanism is particularly pronounced during periods characterized by high investor sentiment and high levels of economic policy uncertainty. Additionally, results are robust to DID models when shell value contamination is removed, an alternative time period and measure of left-tail risk are considered, and placebo tests are conducted.

Does the Energy-Consumption Permit Trading Scheme Improve Carbon Emission Performance? Evidence from a Quasi-Natural Experiment in China

The Chinese government launched the Energy-Consumption Permit Trading Scheme (ECPT) in 2016 as a pilot policy initiative to achieve energy conservation and emissions reduction goals. To generate a quasi-natural experiment, this study used a difference-in-differences (DID) approach with panel data from 2006 to 2020 in China. The goal was to explore the impact of the ECPT policy on the carbon emission performance (CEP) as well as analyze the underlying influence processes. The findings indicate that applying the ECPT has a considerable positive influence on the CEP. In comparison to provinces that did not engage in the pilot program, those that did reported a 4.5% improvement in CEP. We can safely declare that the results remain consistent and trustworthy after undergoing a battery of rigorous tests to assess the robustness of our findings. The mechanism’s evaluation revealed that the ECPT has the potential to improve the CEP, mostly via changing energy consumption patterns and stimulating technological innovation. Furthermore, when we considered heterogeneity, we discovered that factors such as geographical location, the level of green financing development, and the level of environmental regulation may affect the ECPT policy effects.

The impact of pilot free trade zones on entrepreneurship: Evidence from a quasi-natural experiment in China

Exploiting China's pilot free trade zones (FTZs) as an exogenous shock of institutional quality improvement, this study explores the impact of FTZs on urban entrepreneurship. We find that cities with FTZs are associated with higher entrepreneurship. The positive influence of FTZs is more pronounced in western and northern cities, and cities with high administrative levels. The entrepreneurship in service industries is promoted significantly by FTZs. In addition, FTZs foster entrepreneurship by promoting opening-up upgradation of foreign investment and foreign trade and financial development. We also identify the spatial spillover effects and find that entrepreneurship responses to pilot FTZs are significantly stimulated in adjacent cities without FTZs. Last, we show that Shanghai FTZ and Fujian FTZ, rather than Tianjin FTZ and Guangdong FTZ, play a non-negligible function in encouraging new firm creation. This study has important implications for FTZ's planning and spurring economic growth in developing countries.

Selective industrial policy and overcapacity: Evidence from a quasi-natural experiment in China

Overcapacity has long been a "chronic problem affecting China's economic development." Why is China's overcapacity intractable? This study takes the "Revitalization Plans of Ten Industries" (the RPTI) issued by the Chinese government in 2009 as a quasi-natural experiment. It deploys the data of China's A-share listed enterprises and the difference-in-differences (DID) model to investigate the impact of the selective industrial policy on enterprise overcapacity. The results show that the policy has a significant and persistently negative effect on the capacity utilization rate of the treated group. Mechanistic studies reveal that policy-induced overcapacity is caused by increasing government subsidies for the treated group, depressing corporate investment efficiency, and growing capital misallocation. After considering zombie enterprises, we find that the policy mainly leads to the overcapacity of regular enterprises but has no negative impact on zombie enterprises, and zombie enterprises crowd out the capacity utilization rate of regular enterprises in the same industry. This study indicates that a selective industrial policy that prevents the market elimination mechanism from functioning is an underlying cause of overcapacity in China. The study's findings reveal why the administrative de-capacity policies enacted by the Chinese government have failed to eliminate backward capacity but rather created a new overcapacity issue.

How do carbon emissions trading impact the financialization of non-financial companies? Evidence from a quasi-natural experiment in China.

This study examines whether and how carbon trading policy impacts the financialization of non-financial firms, using China emission trading scheme as a quasi-natural experiment. We find that the carbon trading policy exerts a substantial and enduring inhibitory effect on corporate financialization. Our findings are robust to possible result bias and more precise control group. Additionally, we explore potential channels through which carbon trading policy can affect financialization, and find that it curbs financialization by reducing financing constraints. Finally, we demonstrate that the relationship between carbon trading policy and financialization of non-financial companies is moderated by company's ownership, region, and industry competition.

Retracted: The Impact of Innovative Industrial Cluster Policy on Regional Innovation: Evidence from a Quasi-Natural Experiment in China

Retracted: The Impact of Innovative Industrial Cluster Policy on Regional Innovation: Evidence from a Quasi-Natural Experiment in China

Digital economy policy and corporate low-carbon innovation: Evidence from a quasi-natural experiment in China

We explore whether advances in digitalization of economies further green development by studying the impact of big data policies on low-carbon innovation. Using the low-carbon innovation data of Chinese listed companies from 2011 to 2019, we verify that China's big data comprehensive pilot zones (BDCPZ) policy facilitated corporate low-carbon innovation, especially for state-owned enterprises, low-technology firms, and firms with highly educated CEOs. Findings provide policy insights for the synergistic development of the digital economy and low-carbon innovation.