scholarly journals The Green Innovation Effect on Heavy-Polluting Enterprises Under the Environmental Protection Law

2021 ◽  
Vol 9 ◽  
Author(s):  
Leqian Ouyang ◽  
Daming You
Keyword(s):  
Environmental Protection ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Negative Impact ◽  
National Level ◽  
Green Innovation ◽  
Eastern Area ◽  
Long Run ◽  
The Difference ◽  
Financial Power

One of the main purposes of the 2015 Environmental Protection Law (EPL) of the People's Republic of China is to boost the green innovation of the enterprises. Using heavy-polluting enterprises as examples, this paper uses the Difference-in-difference analysis (DDD) technique to analyze the influence of EPL on the green innovation of enterprises under fiscal decentralization and enterprise heterogeneity. Results show that EPL exerts a negative impact on the green innovation of heavy-polluting enterprises at the national level, as well as those in the central and western areas specifically. The only presence of positive motivation for green innovation is being found in the eastern area, although, the motivation seems to be insignificant. The negative impacts have been lasting in the long run, especially for the low-performance enterprises in the central areas. As for the targeted implementation of EPL in China, local governments should make the best use of financial power under fiscal decentralization. This balanced approach is designed to motivate enterprises in different regions with various performance levels to develop green innovation based on their different weaknesses and strengths.

Fiscal decentralization, preference for government innovation and city innovation

2020 ◽  
Vol 14 (2) ◽  
pp. 391-409 ◽  
Author(s):  
Siying Yang ◽  
Zheng Li ◽  
Jian Li
Keyword(s):  
Development Strategy ◽  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Negative Impact ◽  
Moderating Effects ◽  
Content Type ◽  
Effect Model ◽  
Fiscal Expenditure ◽  
Government Innovation

Purpose The purpose of this paper is to examine whether fiscal decentralization has impacts on city innovation level and to examine the moderating effects of the preference for government innovation in China. Design/methodology/approach Using a panel data of China’s 278 cities from 2003 to 2016, the authors first use fixed-effect model and quantile regression to analyze the impact of fiscal decentralization on city innovation level and the variations of impacts conditional on different innovation levels, followed by a mediating effect model to test the moderating effects of the preference for government innovation and its temporal and spatial heterogeneity. Findings The paper finds that fiscal decentralization significantly inhibited city innovation, and with the improvement of city innovation level, the inhibition demonstrated characteristics of “V” type variation. When the degree of fiscal decentralization is between 0.377 and 0.600, the inhibition of fiscal decentralization on city innovation level is the weakest. We further show that fiscal decentralization also inhibits the government's preference for innovation, reduces the proportion of fiscal expenditure on innovation and has a negative impact on city innovation. In addition, the influence of fiscal decentralization on city innovation present clear heterogeneity in space and in time. On one hand, the inhibition of fiscal decentralization on city innovation level in eastern China is significantly weaker than that in central and Western China; on the other hand, after the implementation of China’s innovation-driven development strategy in 2013, the negative impact of fiscal decentralization on city innovation disappeared. Research limitations/implications The research findings have certain policy implications. That is, in the process of decentralization reform, on the one hand, the central government should strengthen the supervision over the fiscal expenditure of local governments and ensure that the central government can play a leading role in the local development strategy, on the other hand, the central government should guard against the distortion of fiscal decentralization on local governments' fiscal expenditure behavior. In addition, the central government should also focus on the heterogeneity of the impacts of fiscal decentralization on cities under different strategic backgrounds and different levels of innovation. Originality/value This paper extends prior research by bringing the decentralization system reform into the study of city innovation system and analyzing its mechanism and its temporal and spatial heterogeneity.

scholarly journals The Impacts of Two Revisions of the China’s Environmental Protection Fee on Firm Performance: Evidence From Stock Markets

2021 ◽  
Vol 9 ◽  
Author(s):  
Huan Zheng ◽  
Yu He
Keyword(s):  
Firm Performance ◽  
Comparative Study ◽  
Environmental Protection ◽  
Stock Markets ◽  
Negative Impact ◽  
Difference In Differences ◽  
Separate Sample ◽  
Limited Impact ◽  
The Difference ◽  
Polluting Firms

This comparative study aims to investigate how China’s environmental protection fee affected firm performance in two separate sample periods, namely 2001–2006 and 2012–2017, as this policy was revised twice in 2003 and 2014. With the Difference-in-Differences (DID) estimation, we find that the second revision of environmental protection fee had a negative impact on heavy polluting firms, while the influence of the first revision seemed to be insignificant. Moreover, the environmental protection fee had a limited impact on other firms, implying that such a policy had achieved its designed effect by precisely governing heavy polluters. Besides, our additional tests show that the environmental protection fee had stronger impacts on non-connected firms and non-SOEs than politically connected firms and SOEs. Our results are robust to various potential endogeneity issues.

scholarly journals Fiscal Federalism in Nepal: Challenges and Opportunities

2019 ◽  
Vol 2 (1) ◽  
pp. 151-170
Author(s):  
R. K. Shah
Keyword(s):  
Natural Resources ◽  
Local Governments ◽  
Fiscal Federalism ◽  
Fiscal Decentralization ◽  
Resource Distribution ◽  
National Level ◽  
The State ◽  
Federal States ◽  
Challenges And Opportunities ◽  
State And Local

The Constitution of Nepal was formally promulgated and it declared the country as a Federal Democratic Republic on September 20, 2015 by the Second CA. Fiscal powers were shared among the federal government, the state governments and the local governments. The Constitution further defined the framework of fiscal federalism within the pattern of income and resource distribution. The primary objectives of this study is to review the modality presented in the new Constitution on the natural resources, economic rights and revenue allocation. The study finds that the fiscal decentralization initiatives have not been successful in minimizing the political, social, economic, regional and ethnic inequalities inherent for nearly 240 years of a unitary system of governance in Nepal. The study recommends that VAT, excise duties and income taxes have to be allocated at the federal, states and local levels in the ratio of 70 percent, 15 percent and 15 percent respectively by the Constitution. Intergovernmental transfer modality has included in the Constitution. Revenue sharing from hydropower has been a controversial issue in Nepal. National Natural Resources and Fiscal Commission (NNRFC) has been constituted at the central level to make national level development plans and to make recommendations for additional grants and loans for the state and local governments. The Constitution has further defined the framework of fiscal federalism within the pattern of income and resource distribution. The theoretical study indicates that there is various controversial and overlapping issues required clarity in process of implementation in the years to come.

Evaluating the Regional Green Innovation Efficiency in China: A DEA-Malmquist Productivity Index Approach

2015 ◽  
Vol 733 ◽  
pp. 355-362 ◽  
Author(s):  
Gang Liu
Keyword(s):  
National Level ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Green Innovation ◽  
Eastern Area ◽  
Empirical Results ◽  
Technological Efficiency ◽  
Index Approach ◽  
Western Area ◽  
Main Barrier

Green innovation has been the most important strategy for countries to gain sustainable development because of the popular environmental protection trend. By application of DEA-Malmquist productivity index approach, this paper evaluates the green innovation efficiency from the year 2005 to 2010 on the national, regional, and provincial level in China. The empirical results reveal that the green innovation efficiency at national level increases steadily, but differs a lot between the eastern, middle and western areas, eastern area best, western area worst and middle areas in the middle. Technological progress is the main enabler which promotes the green innovation efficiency of provinces, while the technological efficiency decline is the main barrier which blocks the green innovation efficiency of provinces. Based on the empirical results, this paper proposes the countermeasures to different development level provinces.

scholarly journals Does Air Pollution Impact Fiscal Sustainability? Evidence from Chinese Cities

Energies ◽  
2021 ◽  
Vol 14 (21) ◽  
pp. 7247
Author(s):  
Ge Gao ◽  
Xiuting Li ◽  
Xiaoting Liu ◽  
Jichang Dong
Keyword(s):  
Air Pollution ◽  
Green Infrastructure ◽  
Local Governments ◽  
Public Services ◽  
Negative Impact ◽  
Fiscal Sustainability ◽  
Pollutant Emission ◽  
Debt Burden ◽  
Long Run ◽  
The Impact

Fiscal sustainability is an issue of great concern for governments globally and air pollution control has become an important factor affecting fiscal sustainability. This study aims to examine the impact of air pollution on fiscal sustainability in the short and long run. We conducted an empirical analysis based on air pollution and local government debt data on China’s prefecture-level cities in 2014–2019, using regression discontinuity design (RDD) and a panel data model. The results show that air pollution reduces the debt burden of governments in the short run. However, in the long run, addressing the negative impacts of air pollution adds to the debt burden of local governments, hindering fiscal sustainability. Fiscal freedom and the level of public services significantly moderate the negative impact of air pollution on fiscal sustainability. A higher level of fiscal freedom generally indicates a greater incentive for local governments to raise pollutant emission standards, strengthen the construction of green infrastructure, and subsidize green enterprises. Furthermore, a higher level of public services reflects better infrastructure and higher levels of investment in environmental protection, which help to reduce the negative impact of air pollution. The governments are suggested to take measures to effectively control air pollution, so as to enhance fiscal stability in the long run.

scholarly journals China’s New Environmental Protection Law and Green Innovation: Evidence from Prefecture-Level Cities

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-13
Author(s):  
Wen Chen ◽  
Ying Wu
Keyword(s):  
Intellectual Property ◽  
Environmental Protection ◽  
Intellectual Property Protection ◽  
Green Innovation ◽  
Banking Competition ◽  
Sensitivity Tests ◽  
High Pollution ◽  
The Difference ◽  
The Government ◽  
The Impact

This paper examines the impact of China’s new environmental protection law on green innovation. Using a large sample of Chinese prefecture-level cities for the 2010–2016 period and the difference-in-differences (DID) methodology, we provide strong evidence that the new environmental protection law promotes green innovation. This finding is robust to a battery of sensitivity tests. The micromechanism analysis shows that the new environmental protection law can promote green innovation by imposing stricter financial constraints on enterprises in high-pollution industries and increasing their incentives for green innovation to meet green credit requirements. Further, we find that the impact of the new environmental protection law on green innovation is more prominent in prefecture-level cities with a lower level of banking competition and for prefecture-level cities with stronger intellectual property protection. Overall, these findings suggest that the new environmental protection law has played an important role in promoting green innovation in China. To improve the effect of the new environmental protection law on green innovation, the government can consider lowering banking competition and strengthening intellectual property protection.

scholarly journals Fiscal Decentralization, Accountability and Corruption Indication: Evidence from Indonesia

2021 ◽  
pp. 29-40
Author(s):  
Newin Ananta Aji Saputra ◽  
Doddy Setiawan
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Negative Impact ◽  
Secondary Data ◽  
Financial Statements ◽  
Linear Regression Models ◽  
Transparency International ◽  
Corruption Index ◽  
Negative Effect

In the Corruption Perception Index 2019, Indonesia ranks 90th among 180 countries (Transparency International, 2020). Indonesia still among the lowest rank in the corruption index. This index shows that corruption is an important issue for Indonesia. Therefore, the study aims at examining the determinants of corruption in Indonesia. This study focuses on two important aspects: fiscal decentralization and accountability. Since the enactment of Law Number 22 of 1999, which was then revised by Law Number 32 of 2004, the local government can manage fiscal. It is expected that local governments can use resources for the improvement of the wealth of the citizens. Further, the local government has a responsibility for using the resources. However, there are cases regarding corruption in local government in Indonesia. This study uses secondary data from local government financial statements to search the corruption indication, level of fiscal decentralization, and accountability. The study’s sample consists of 94 districts/cities on Java during the 2013-2015 period. The dependent variable in this study is an indication of corruption. Furthermore, the study divided corruption into three aspects: regional losses, potential regional losses, and revenue deficiency. The independent variables in this study were fiscal decentralization and accountability. This study uses multiple linear regression models to test the effect of fiscal decentralization and accountability on Indonesia’s corruption indicator. The result of the study shows that fiscal decentralization has a negative impact on corruption indication. The higher degree of fiscal decentralization minimizes the corruption indication in Java island. Meanwhile, fiscal decentralization has a negative effect on regional losses and revenue deficiency. Accountability has no significant on corruption indication. However, accountability has a negative impact on regional losses. In conclusion, both fiscal decentralization and accountability have curb corruption indication in the regional losses aspect.

scholarly journals The Impacts of Fiscal Decentralization on the Quality of Government in China: A Test of Market-Preserving Federalism at the Provincial Level

2020 ◽  
Vol 11 (2) ◽  
pp. 89
Author(s):  
Ping Zhang ◽  
Haosheng Zheng ◽  
Qiang Ren
Keyword(s):  
Local Governments ◽  
Fiscal Decentralization ◽  
Empirical Test ◽  
Optimal Level ◽  
Potential Influence ◽  
Eastern Area ◽  
Fiscal Autonomy ◽  
Self Sufficiency

The potential influence of fiscal decentralization on economic growth in China has been extensively studied. This paper examines whether fiscal decentralization has influenced marketization and regional disparity (intra-provincial expenditure inequality) and the tradeoff between them (quality of government, QoG). When local governments have sufficient fiscal autonomy, decentralizing fiscal power to sub-provincial governments is found to have a greater impact on increasing marketization, highlighting the important role of fiscal self-sufficiency in the effect of fiscal decentralization on market efficiency. Measuring the QoG from the marketization versus disparity perspective, we find a reversed U-shape relationship between revenue decentralization and QoG. Comparing the effect of fiscal decentralization on the QoG in different regions, intra-provincial revenue decentralization in the eastern area is above the optimal level, while the fiscal decentralization in the middle and western areas is near the optimal level. This paper combines the perspectives of fiscal decentralization and governance and conducts an empirical test of market-preserving federalism to explain differences among provinces.

scholarly journals Effects of FDI on the Efficiency of Government Expenditure on Environmental Protection Under Fiscal Decentralization: A Spatial Econometric Analysis for China

2019 ◽  
Vol 16 (14) ◽  
pp. 2496 ◽  
Author(s):  
Zhang ◽  
Qu ◽  
Zhang ◽  
Li ◽  
Miao
Keyword(s):  
Environmental Protection ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Government Expenditure ◽  
Spillover Effect ◽  
Data Envelopment ◽  
Ecological Civilization ◽  
Spatial Econometric ◽  
The Government

Most governments strive for an ecological civilization so the efficiency of government expenditure on environmental protection (EPEE) is an important issue. While it is recognized that foreign direct investment (FDI) enhances environmental protection, this investigation focuses on the effects of FDI on the efficiency of government expenditure on environmental protection under fiscal decentralization. Analysis is conducted using an output-oriented data envelopment analysis (DEA) scale return model to calculate the efficiency of environmental protection spending in China. Then, a spatial model is built to test the linkages among FDI, fiscal decentralization and the efficiency of government expenditure. The results reveal that, firstly, the efficiency of government spending has been enhanced over the last 10 years. Secondly, FDI is positively correlated with the efficiency of government environmental expenditure in terms of both quantity and quality of spending and it has a positive spillover effect. Thirdly, financial decentralization is negatively correlated with the efficiency of environmental spending, but it improves the effect of FDI. Accordingly, policy proposals are that the government should improve the supervision system for environmental spending and local governments should pursue FDI, improve the structure of FDI and use its spillover effect to enhance the efficiency of environmental expenditure.

scholarly journals The relationship between fiscal decentralization and trust in government: evidence from the South Korean case

2020 ◽  
pp. 002085232093332
Author(s):  
Soojin Kim ◽  
Yunsoo Lee ◽  
Taehee Kim
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Public Trust ◽  
Government Policies ◽  
Trust In Government ◽  
South Korean ◽  
Revenue Sources ◽  
Long Run ◽  
Decentralized Governance

To date, many developing countries have continued to implement fiscally decentralized governance systems to respond to the diversified needs of local residents more effectively and to better act in line with the public interest. However, little is known about the fiscal decentralization–trust link. Focusing empirically on the South Korean case, this study examines how financially decentralized governance might increase government trustworthiness not just at the national level, but also at the local level. The results of multilevel regression and panel data analyses partly confirm the results of pro-fiscal decentralization studies in that the growth of local fiscal autonomy is positively and significantly related to public trust in government. Specifically, we find that as fiscal decentralization improves, levels of trust in local government also rise. In addition, our findings show that in terms of having higher levels of public trust in government, the impact of revenue decentralization tends to be greater than that of expenditure decentralization. This evidence implies that allowing local governments to have their own revenue sources rather than expenditure autonomy can be a way to better respond to people’s needs in the long run. Points for practitioners First, as fiscal decentralization improves, levels of trust in local government also rise. Second, allowing local governments to have their own revenue sources rather than expenditure autonomy can be a way to better respond to people’s needs in the long run. Third, government policies should aim to provide benefits to citizens for their own sake, such as by exercising effective delivery or improving the quality of public services and programs that are likely to be viewed positively by constituents. This could encourage citizens to engage with the current public-sector spheres in ways that affect their confidence and expectations of government policies and bureaucrats in a positive manner.

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