In:
Business Strategy and the Environment, Wiley, Vol. 32, No. 1 ( 2023-01), p. 538-550
Abstract:
In recent years, the Chinese government has implemented numerous regulations to address environmental deterioration. Several studies have examined the effect of environmental regulation policies on China's economic performance. However, whether environmental regulations can alleviate China's resource misallocation problem—a critical issue in transitional economies—remains unclear. This study fills this gap in the literature by employing the difference‐in‐differences method to examine how environmental regulations affect resource misallocation. We found that stringent environmental regulations have reduced the extent of resource misallocation in China, with resource reallocation being the driving force behind this improvement. The emission reduction mandate reduces investment inflows and hinders firms' entry into regions with low total factor productivity, while directing the flow of resources to highly productive areas.
Type of Medium:
Online Resource
ISSN:
0964-4733
,
1099-0836
Language:
English
Publisher:
Wiley
Publication Date:
2023
detail.hit.zdb_id:
2025936-0
detail.hit.zdb_id:
1127954-0
SSG:
3,2
