Quasi-natural Experiment In China Research Articles

The impact and nonlinear relationship of low-carbon city construction on air quality: Evidence from a quasi-natural experiment in China

Many low-carbon policies have been implemented to realize China's “double carbon goals”. Maximizing the synergistic effects of pollution reduction is very important. This study develops difference-in-difference and panel threshold models to analyze the effects of the low carbon city pilot (LCCP) policy on air quality and the nonlinear relationship between them. The results show that: (1) As a whole, the LCCP policy can effectively improve air quality in pilot cities. When regional heterogeneity is concerned, the policy shows a pollution mitigation effect in the eastern and central regions, while it shows a green paradox effect in the western region. (2) The LCCP policy has a spatial spillover effect and displays a U-shaped relationship in terms of distance in a full sample context. The spatial spillover effects of the LCCP policy in terms of the distance vary across regions. (3) There is a nonlinear relationship between LCCP policy and air quality based on the level of economic development and city innovation. When a city's economic development and innovation levels are relatively weak, the policy effect is reflected as a green paradox effect. The LCCP policy can significantly improve the air quality in the pilot cities only when the economic development level and city innovation level exceed a certain threshold. That means different cities should make their low-carbon development plans due to their development level.

Big data industry development and carbon dioxide emissions: A quasi-natural experiment

Big data industry development and carbon dioxide emissions reduction are the crucial driver and objective functions of economic growth, respectively. Whether the two types of corresponding policies can achieve the “win-win” effect is the key to green development transformation in the future. However, little attention has been paid to the influence of big data industry development on carbon dioxide emissions. Based on the quasi-natural experiment in China's national big data comprehensive experimental area, the paper identifies the causal effect between big data industry development and carbon dioxide emissions. Specifically, the panel data of 282 cities in China spanning from 2010 to 2019 are used in regression analysis. The study reveals that the big data industry development has a substantial impact in reducing carbon dioxide emissions. Meanwhile, the findings are confirmed by a set of rigorous robustness checks. The heterogeneity analyses suggest that the effect of inhibiting carbon dioxide emissions due to the big data industry development is more significant in eastern & central China, and large-sized cities. In addition, the big data industry reduces carbon dioxide emissions through the effects of industrial structure optimization, technological innovation, and resource allocation. Our findings contribute to the nexus between big data industry development and carbon dioxide emissions. In light of these findings, the paper recommends that governments integrate economic growth and environmental protection policies by promoting big data industry development.

Green financial policy and corporate risk-taking: Evidence from China

This study investigates the impact of green financial policy on corporate risk-taking, based on data from China's A-share listed companies during 2012–2020. Exploiting a quasi-natural experiment in China, the Green Financial Reform and Innovation Pilot Zones (GFRIPZ), we find that green financial policy has a positive effect on corporate risk-taking. Our analysis shows that the primary effect operates through two channels: reducing agency costs and alleviating financial constraints. The increase in risk-taking is particularly pronounced among companies with low R&D investment and poor ESG performance. This research provides insights for designing more effective environmental programs in emerging economies.

Does the implementation of green finance regulation promote the high-quality development of enterprises? Evidence from a quasi-natural experiment in China.

The improvement of enterprise total factor productivity and labor productivity is the micro-embodiment of high-quality economic development. Green finance relies on the dual functions of resource allocation and environmental regulation to guide enterprises to adjust their mode of operation through incentive and restraint mechanisms, attach importance to energy conservation and environmental protection, and guide enterprises to develop with high quality. Taking the construction of the green financial supervision system in 2016 as a quasi-natural experiment, we constructed a difference-in-difference model to investigate the impact and mechanism of green finance on the high-quality development of enterprises, based on the panel data of Chinese A-share listed companies from 2006 to 2020. The results show that the implementation of green finance effectively promotes the high-quality development of enterprises. This promotion effect is heterogeneous from perspectives of enterprise-specific characteristics, executive education background, and environmental regulation intensity. The influence mechanisms mainly rely on tightening financial constraints, upgrading the level of green technology innovation, and improving the quality of internal control. These findings provide an important decision-making reference for better implementing green finance policies and promoting high-quality economic development under the green and low-carbon concept and carbon peak carbon neutrality goals.

Can the green credit policy reduce carbon emission intensity of “high-polluting and high-energy-consuming” enterprises? Insight from a quasi-natural experiment in China

Previous studies have examined the effect of green credit policy (GCP) on innovation, the environment, and corporate performance. However, few studies have focused on GCP's impact on carbon reduction of high-polluting and high-energy-consuming (“two high”) enterprises. Based on millions of unbalanced panel data from the China Taxation Survey database from 2009 to 2016, this study considers the most acclaimed GCP (“Green Credit Guideline” in 2012) as a quasi-natural experiment and adopts a difference-in-difference (DID) method along with interactive fixed effects to study the impact of GCP on the carbon emission intensity of “two high” enterprises. In general, we find that GCP significantly reduces the carbon emission intensity of “two high” enterprises. This effect is achieved by optimizing the energy structure, promoting technology transformation, and increasing the intensity of innovation input. A heterogeneous analysis shows that the GCP has a significant suppression effect on “two high” enterprises in eastern and western regions, although its impact is less evident in central areas. Moreover, it shows that non-state-owned, unsubsidized, medium-scale, and large-scale “two high” enterprises are more significantly negatively impacted by the GCP. Finally, to further address the endogeneity problem, the propensity score matching–difference-in-difference (PSM-DID) estimation is conducted and pragmatic policy implications are proposed to improve the development and effectiveness of the GCP.

Environmental regulation and stock price synchronicity: Evidence from a quasi-natural experiment in China

Prior literature under-theorizes the effect of environmental regulation on firms' stock market outcomes. Our study addresses this gap by investigating the impact of environmental regulation on stock price synchronicity using the promulgation of China's new Environmental Protection Law (EPL) as a quasi-natural experimental setting. Integrating the institution- and resource-based views, our findings show that the new EPL has significantly mitigated high-polluting firms' stock price synchronicity, with this effect being more pronounced for financially constrained firms and less significant for politically connected ones. Our findings also confirm that enhanced environmental and accounting information disclosure serve as underlying mechanisms of the focal relationship. Our study contributes to a finer-grained understanding of the consequences of environmental regulation and presents a more complete account of the determinants of stock price synchronicity.

Information disclosure by industry and the cost of equity: Evidence from a quasi-natural experiment in China

Based on manually collected data, this study examines the impact of information disclosure by industry (IDI) on firms’ cost of equity. Using a staggered difference-in-difference design, we find that the cost of equity of the firms that adopt IDI regulations is decreased. The results are robust when we address endogeneity and use alternative measurements of the cost of equity. Moreover, this effect is more pronounced in firms with higher individual ownership and located in areas with weak legal environments. The path analysis results show that the enactment of IDI regulations reduces the cost of equity by improving information transparency and reducing the agency cost of management.

All-for-One Tourism Demonstration Zones and High-Quality Development of Tourism: Evidence from the Quasi-Natural Experiment in China

The all-for-one tourism guides the development of the tourism industry in China and promotes coordinated development of the economy and society. Existing studies emphasize the significance of all-for-one tourism but pay limited attention to the impact and mechanism of all-for-one tourism on the high-quality development of tourism. By employing the all-for-one tourism demonstration zones as a quasi-natural experiment, this research uses the time-varying difference-in-differences (DID) model to empirically investigate the relationship between all-for-one tourism demonstration zones and the high-quality development of tourism. In particular, under the guidance of the new development philosophy, this research constructs a measurement and evaluation indicator system for the high-quality development of tourism from five dimensions, including innovative, coordinated, green, open, and shared development. The results show that the all-for-one tourism demonstration zones positively impact the high-quality development of tourism, and the result is robust to a series of robustness checks, including the placebo test and the propensity score matching (PSM) procedures. Network infrastructure construction and tourism talent agglomeration are mechanisms channelling through all-for-one tourism demonstration zones and high-quality tourism development. Heterogeneity analysis reveals positive impacts of all-for-one tourism demonstration zones on central and western regions and provinces with a low proportion of tertiary sector.

Does Information Blocking on Internet Matter Corporate Over-Investment: Evidence from a Quasi-Natural Experiment in China

ABSTRACT Focusing on Google’s withdrawal from mainland China as a unique setting, this study investigates the impact of information blocking on corporate over-investment. Using a sample of Chinese firms during the period of 2007 to 2014 and employing a difference-in-difference (DID) approach, our findings reveal that corporate over-investment is significantly higher for the treatment firms (firms with high international sales) in the post-period of Google’s withdrawal than that in the pre-period of Google’s withdrawal, suggesting that overseas information blocking boosts corporate over-investment for firms with more global business. Moreover, the positive relation between Google’s exit and firm-level over-investment is less pronounced for cross-listed firms than for non-cross-listed firms, implying that cross listing plays a crucial role in breaking overseas information blockade on internet search for domestic investors. Above findings are still valid after using alternative measures to capture over-investment and the treatment group. Mechanism analysis and heterogeneity tests show that Google’s exit may exacerbate agency conflicts and thus leads to an increase in corporate over-investment. Our study provides an important reference for the understanding of the roles of internet search in information transmission and corporate governance.

Creditor protection and trade credit financing: Evidence from a quasi-natural experiment in China

Based on the listed firms in China's A-share stock market from 2012 to 2021, we investigate the relationship between the introduction of bankruptcy courts and trade credit financing. The empirical results show that firms obtain more trade credit after the introduction of bankruptcy courts in their location. This finding is robust to a series of endogeneity and robustness checks. We further find that the effect of bankruptcy courts on trade credit financing is more pronounced when the firm has a greater distance from its suppliers and higher financial distress. Overall, our findings show the positive effect of the introduction of bankruptcy courts and have important implications for policymakers in emerging markets.

Effects of carbon emission trading schemes on green technological innovation by industrial enterprises: Evidence from a quasi-natural experiment in China

To mitigate global climate change and achieve the targets of the Nationally Determined Contributions (NDCs), the Chinese government implemented a carbon emission trading scheme (ETS) pilot policy in batches. However, there has been no unified consensus at present on whether the ETS pilot policy has stimulated green technological innovation. By applying a multi-period propensity score matching and difference-in-differences method, as well as using panel data from 2007–2019 of A-share listed Chinese firms, this study constructed a quasi-natural experiment to examine the causal effects of China's ETS pilot policy on the green technological innovation of the firms. The results were validated after a series of robustness checks and showed that the ETS has significantly encouraged green technological innovation in industrial enterprises. This positive effect is greater for firms with large capital scales, with better corporate governance, especially for those in the mining and manufacturing industry. Further analysis indicated that corporate social responsibility and operating income were the driving factors of the effects on innovation, whereas R&D expenditures have inhibited the effects.

Price limit performance: New evidence from a quasi-natural experiment in China's ChiNext market

This study examines the impact of daily price limits on market performance and trading activity by using a quasi-natural experiment in China. It focuses on the case of the ChiNext market, where the daily price limits of stocks increased from 10% to 20% in 2020. The results show that, initially, the stock prices and occurrences of 10% price limit hits increase, but then decline after the new price limits have been implemented. The level of trading liquidity and volatility increases significantly, with a greater impact on the short term than the long term. These price limit performances are more pronounced for stocks with additional retail interest. The analysis of detailed trading data reveals that institutional investors initially purchase ChiNext stocks in large quantities, followed by retail investors who purchase smaller quantities. In the long run, institutional investors tend to increase their holdings, while retail investors tend to sell their holdings. Additionally, there is a temporary increase in investor attention, price synchronicity, and stock risks, followed by a decline. The findings suggest that wider price limits increase trading volumes and enhance long-term market efficiency, but encourage immediate price manipulation, causing short-term overreactions and long-term reversals. This study provides valuable insights for building an effective price limit system.

Enhancing export product quality through innovative cities: A firm-level quasi-natural experiment in China

China plays a significant role in the global product supply chain through its exports. To remain competitive, Chinese firms need to manufacture products cost-effectively. Revamping innovative cities can contribute to this goal, but empirical evidence in this area is limited. Therefore, this paper scrutinizes the innovative city pilot policy’s consequences on firms’ export performance and product quality. We employ the time-varying Difference in Difference (DID) model and harness a comprehensive firm-by-product level database to estimate the co-movement between the pilot intervention and the performance of the export product. Based on the findings, we unveil that a smart intervened city can significantly boost firms’ export product quality, which still holds after multiple robustness checks. Furthermore, innovative cities heighten the quality of the manufactured products when we consider firm-level (i.e., private, foreign, and ordinary trade enterprises), industry-level (i.e., low-polluting, capital-intensive, and technology-intensive industries), and regional (i.e., Middle, and Western regions) heterogeneities. In addition, the intervened smart city strategy impacts the efficacy of export product quality through policy and innovation-driven effects. Over and above, policymakers and experts should support state-of-the-art ideas while considering local conditions, providing guidance for decision-making in China’s innovative development strategy.

The impact of digital government policy on entrepreneurial activity in China

Digitalization of government is a crucial strategy for enhancing national competitiveness and improving public services in numerous countries. This study introduced a quasi-natural experiment in China to evaluate the impact of a country’s digital government policy on entrepreneurship. Using city-level data and regression analysis, we find that implementing the policy increases the number of newly registered firms by 0.0028 per 10,000 working-age labours. The study also examines potential mechanisms for this effect and finds evidence that the policy improves government efficiency, reduces risk-seeking behaviours of local government, and promotes access to financial resources. This study’s findings contribute to research on digital government initiatives in developing countries and can inform future policy decisions.

How Does Internet Infrastructure Construction Affect the Urban–Rural Income Gap? Evidence from a Quasi-Natural Experiment in China

Internet infrastructure, like other infrastructures, is gradually becoming an important force affecting economic and social development, laying the foundation for the development of the digital economy. Based on a quasi-natural experiment, combined with the data of 201 Chinese prefectures from 2010 to 2018, this study constructs a difference-in-differences approach to examine the impact of internet infrastructure construction (IIC) on the urban–rural income gap. The main results show that IIC has a significant widening effect on the urban–rural income gap. Our study also finds that the effect has significant location and city attribute heterogeneity. Specifically, the IIC widens the urban–rural income gap more strongly in central-western, inland, provincial capital and small-scale cities. Furthermore, the promotion of IIC to the income of urban residents far exceeds that of rural residents, which is a typical manifestation of the third-level digital divide. However, increasing the education level of residents is beneficial to alleviating the widening effect of IIC on the urban–rural income gap. Overall, national policymakers should pay attention to the possible inequalities in promoting the development of national broadband internet. Policies for improving the digital application abilities of residents, especially vulnerable groups, are highly recommended to share the digital dividend.

The impact of urban digital transformation on resource sustainability: Evidence from a quasi-natural experiment in China

Currently, advancing digital economy and resource crisis occur simultaneously in several countries. Whether digital transformation can improve resource sustainability, particularly energy sustainability, is an urgent problem for governments. We used panel data from 230 prefecture-level cities in China from 2006-2019 to assess the impact of urban digital transformation strategies represented by smart cities on urban resource sustainability using the difference-in-difference (DID) model. The results show that urban digital transformation significantly enhances urban resource sustainability, which still holds after passing robustness tests. The mechanism analyses indicate that urban digital transformation can promote resource sustainability through technological innovation, structural transformation, and capital reallocation. Further analysis reveals that implementing urban digital transformation in eastern, non-resource-based cities and cities with unreasonable industrial structures has a more favourable effect on resource sustainability. This paper provides an empirical basis for the urban digital transformation to empower green urban recovery and low-carbon development by promoting sustainable resources.

Official environmental accountability policy and firm’s environmental violations: evidence from a quasi-natural experiment in China

Official environmental accountability policy and firm’s environmental violations: evidence from a quasi-natural experiment in China

The Energy-Saving Effect of E-Commerce Development—A Quasi-Natural Experiment in China

This study provides a viable path to save energy by means of e-commerce development. Taking the national e-commerce demonstration cities (NEDC) pilots policy implemented in China as a quasi-natural experiment, based on the city panel data from 2006 to 2019, this study applies the multi-period difference-in-difference (DID) method to evaluate the effect of NEDC on energy saving in pilot cities. The empirical results suggest that the NEDC policy obviously contributes to energy conservation. The treated cities reduced energy consumption by 14.2% as a result of the implementation of NEDC, relative to the untreated cities. The conclusions remain valid after conducting robustness tests such as placebo test, instrumental variables regression, propensity score matching-difference-in-difference (PSM-DID), and synthetic difference-in-difference (SDID). The NEDC achieves energy-saving effects through technological innovation, industrial restructuring, and economic agglomeration. Furthermore, the heterogeneity analysis indicates that, in cities with high levels of human capital, well-developed information infrastructure, non-resource-based cities, and favorable business environments, the impact of NEDC on energy saving is more significant. Analysis of spatial effects shows that the implementation of NEDC has negative externalities, increasing energy consumption in the surrounding area. In the context of the digital economy, this paper presents new insights on the relationship between e-commerce and energy consumption and provides policy direction for countries looking for energy-saving solutions.

Does the construction of smart cities make cities green? Evidence from a quasi-natural experiment in China

This paper focuses on whether the construction of smart cities can expand green space. Based on smart cities policy in China, a quasi-natural experiment is conducted by using the Heterogeneity - Robust estimator in differences-in-differences model. According to detailed theoretical analysis and rigorous empirical research, and main conclusions are as follows. First, the construction of smart cities can directly expand the green space due to the land resource allocation. The above basic conclusion remains reliable after a series of robustness tests. Second, the effect of construction of smart cities on the green space is heterogenous. The construction of smart city in the three batches has a positive impact on expending green space and the strongest positive effect on green space is seen in the smart cities established in 2012. The high-level economic scale and high-level science and technology are vital premises for smart cities to expand green space. Third, the construction of smart cities can indirectly expand the green space by promoting online work and services and increasing disposable income. Last, the “Broadband China” Strategy has a positively moderate effect on the construction of smart cities in expanding green space.

Can Ecological Governance Policies Promote High-Quality Economic Growth? Evidence from a Quasi-Natural Experiment in China

The implementation plan of the National Ecological Civilization Pilot Zone (Jiangxi) is an experimental policy aimed at exploring the path of ecological value realization, optimizing industrial structure, and ultimately promoting the green economic development of cities in ecologically distressed areas based on good ecological protection and construction. Its policy objectives are as follows: (1) provide policy references for the development of other ecologically distressed areas in other Chinese territories, and (2) achieve a win–win situation for both ecological improvement and economic development and promote the harmonious development of humans and nature. This study considers China’s ecological governance pilot policy as a “quasi-natural experiment” based on a panel of 81 Chinese cities in Jiangxi Province, China, from 2014 to 2020. A DID model is constructed to study the impact of China’s ecological governance policies on the quality development of Chinese cities in four dimensions: economic development, economic structure, ecological environment, and the disposable income of residents. The following impacts are observed: (1) Ecological governance policies have insignificant effects on GDP promotion, and the above findings still hold after a series of robustness tests, such as the parallel trend test and PSM-DID and placebo tests. (2) Ecological governance policies can significantly improve the rationalization of the economic structure, promote the improvement of ecological environments, and increase the disposable income of residents in the pilot cities. (3) Due to the strong control of local governments over regional economies in China, the stronger the government intervention in the economy, the greater its effect on policy inhibition. (4) The economic structure of ecologically distressed regions is relatively homogeneous, and the primary industry makes up a high proportion of agricultural production. Since China abolished agricultural taxes in 2006, local governments are unable to obtain government tax revenues from agricultural production. The ecological management policy can not only protect land fertility but also reduce the over-exploitation of land resources. It can indirectly increase the scale of agricultural production per unit of land (i.e., the same land resources can create more output value), prompt the transfer of agricultural labor to secondary and tertiary industries, and promote the development of secondary and tertiary industries, which in turn improves the source of local government tax revenue. Moreover, the increase in government tax revenue can increase investment in ecological environments. This in turn increases the tax revenue of local governments, and the increase in government tax revenue can increase investments in ecological and environmental management; this eventually results in a green and high-quality development path with respect to the positive cycle of ecological protection and economic development. Therefore, the scale of agricultural production per unit of land and government tax revenue are important mediating variables for ecological environment improvements, and the mediating effect is obvious.