Incomplete Enforcement of Pollution Regulation: Bargaining Power of Chinese Factories

By Hua Wang, Nlandu Mamingi, B. Laplante, Susmita Dasgupta. Environmental and Resource Economics, 2002

269 citations recorded by the source corpus.

Only a limited number of papers haveempirically examined the determinants of themonitoring and enforcement activities performedby the environmental regulator. Moreover, mostof these studies have taken place in thecontext of developed countries. In this paper,we empirically examine the determinants of theenforcement of pollution charges in China.More precisely, we seek to identify thecharacteristics which may give firms more orless bargaining power with local environmentalauthorities pertaining to the enforcement(collection) of pollution charges. Firms fromthe private sector appear to have lessbargaining power than state-owned enterprises.Firms facing an adverse financial situationalso appear to have more bargaining power.Finally, we also show that the higher thesocial impact of a firm's emissions (asmeasured by the presence of complaints), thesmaller the bargaining power of the firms withlocal environmental authorities.

Subfields: Economics and Econometrics, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/8175df03a8444733613c2bac3ee495daf65833e7

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Citations in the corpus

Industrial Ownership and Environmental Performance: Evidence from China (2002, unknown): “Wang et al. (2003) have empirically demonstrated the lower bargaining power of POEs as compared with SOEs and COEs.”
Transboundary pollution in China: a study of polluting firms' location choices in Hebei province (2013, unknown): “In China, environmental policy implementation varies greatly from one province to another (Wang et al., 2003).”
Spatial heterogeneity of economic development and industrial pollution in urban China (2013, unknown): “Wang et al. (2003) argued that SOEs have stronger bargaining power with central and local governments regarding environmental regulations in contrast to the privately owned enterprises.”
Are Foreign Investors Attracted to Weak Environmental Regulations? Evaluating the Evidence from China (2005, background): “In addition, recent evidence shows that state-owned enterprises (SOEs) havemore bargaining power than other firms and that this has led to significantly lower environmental levies for SOEs relative to foreign-invested and Chinese private firms (Wang et al., 2003; Wang and Jin, 2006; Wang and Wheeler”
Political Connections and Industrial Pollution: Evidence Based on State Ownership and Environmental Levies in China (2016, background): “Through political connections or other means, SOEs may have stronger bargaining power with local environmental authorities to negotiate environmental enforcement compared to nonSOEs (Wang et al. 2003).”