Publication

This paper examines the impacts of the centralization of authority in the appointment of civil servants on the effectiveness of regulatory enforcement efforts. We exploit a unique personnel reform in China's Environmental Protection Bureaus (EPBs), which shifts the power to appoint local EPB directors from municipal governments to the provincial level. Based on detailed personnel records and administrative punishment data, we find that local EPB directors under centralized personnel authority increase the number of punishments and the total amount of fines by 13.0% and 19.0%, respectively. The impact on environmental enforcement remains of comparable magnitude even after 3 years, resulting in improved environmental quality. We identify three possible mechanisms driving this positive effect: the reduction of distorted incentives, the enforcement of objectives with interjurisdictional externalities, and the selection of more qualified appointees. Our analysis contributes to the understanding of the consequences of the recent trend toward ``reverse decentralization'' in institutional settings.

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This paper investigates the causal effects of the China Securities Regulatory Commission (CSRC)’s inspection on firm's government subsidies using a randomized inspection policy in the context of China. Our difference-in-differences estimation shows that inspections of regulators significantly reduce firm's subsidies by around [10.24%, 26.03%]. Plausible mechanisms are the reduction of government-firm connection, information asymmetry, and rent-seeking. Our findings are more pronounced among firms with poor corporate governance, fewer policy burdens, and higher financial risks. We also find a significant industrial and regional spillover effect and a promotion in firm performance. Overall, this paper evaluates the effects of external regulation on government subsidies and emphasizes the importance of supervision in correcting the helping hand of local governments, thus providing timely implications for policymakers.

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This study investigates the impacts of COVID-19 lockdown on municipal solid waste (MSW). Based on a unique data of daily discarding records of 252 communities in Beijing, China, we conduct a difference-in-differences estimation and find that the total daily MSW decreases by 134.16 kg in a community, and the average weight of MSW per package decreases by 56.8% after the COVID-19 lockdown. We consider a series of potential mechanisms, such as MSW hoarding, shifts in discarding time, and fear of going out, and find the most support for consumption pattern shifts with reduced consumption. We then discuss the effect of lockdown on the reduction of MSW generation because of the strict restriction of consumption. We also conduct various heterogeneity analyses. Our results present clear implications for municipal waste management by highlighting the effect of lockdown on the generation of MSW and the underlying consumption mechanism.

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China has exerted great efforts in the past decades to fight against particulate matters and has achieved initial results, but ozone pollution has increased significantly. Using a unique diagnostic data of a peninsula city in China, this study evaluates the health effect of ozone pollution on emergency room admission and medical expenditure. We present strong evidence that ozone has a significant negative impact on health. Specifically, one standard deviation increase in ozone pollution will result in an additional 3.30, 2.25, and 4.94 weekly emergency room admissions in respiratory, ophthalmology, and internal medicine. Our analysis of medical expenditure implies that one standard deviation increase of ozone pollution generates a 5.89 million yuan increase of annual medical expenditure for a representative city. We further show that land wind, sunny weather, and dense roads significantly moderate the adverse health effects of ozone. Our findings offer a timely reminder for policymakers to pay attention to “invisible” ozone pollution while managing particulate pollution.

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This study investigates the distortion of government disclosure on air pollution and further explores underlying political incentives that drive such distortion. We introduce a newly developed method, that is, bunching estimation based on notch points, to identify the distortion in the air pollution index disclosed by local governments. Results show that the magnitudes of distortion are significant and vary across cities. We present evidence that local politicians' promotion incentives substantially drive the distortion of environmental information. Importantly, we find that high-frequency disclosure requirements effectively discipline the behaviors of local governments because of increased manipulation costs. Overall, we contribute to the literature by identifying the distortion of government information disclosure, investigating the underlying causes, and examining the validity of new disclosure policies in shaping government behaviors.

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This paper employs a bunching estimation method to assess how the right to participate in international trade influences corporate innovation activities. Drawing on matched samples from the Annual Survey of Industrial Production, the China General Administration of Customs database and the Patent database, the study finds that firms significantly adjust their registered capital beyond the policy threshold to obtain trading rights and thus be able to participate in international trade, resulting in a 14.6% increase in the proportion of firms engaged in international trade. From the extensive margin perspective, there is a 14% increase in the number of firms involved in independent research and development among those engaged in the policy. From the intensive margin perspective, the number of patents for firms participating in the policy increased 2.65 times compared to the control group. The quality of patents for exporting firms also significantly improved due to the continuous accumulation of advanced knowledge from abroad. Learning-by-doing is identified as the primary mechanism through which trade promotes innovation. Finally, the paper concludes that the promotion effect presents a heterogeneous distribution across different types of firms and industries, analysing potential mismatching issues. By employing a novel estimation method, this work provides an in-depth overview of the impact of firm participation in international trade, enriching the existing literature and offering policy implications for China’s path towards high-quality development. 

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In 1899, Veblen first used conspicuous consumption to depict the behavior of economic individuals in his The Theory of the Leisure Class. Although this theory provides an intuitive explanation for consumption behavior, limited by the data, the relevant empirical work is still rare. This paper uses a micro data of auto mortgage transaction provided by a large company in Shanghai to empirically test the impact of migrant identity on conspicuous consumption. We find that the conspicuous consumption expenditure of the migrants is significantly higher than that of local residents. On average, the automobile consumption expenditure of migrants is 2.3% higher than that of local residents. Using the theoretical relationship between the average income of reference group and conspicuous consumption behavior, this paper verifies the status signaling nature of conspicuous consumption, that is, the mechanism of seeking wealth social status by showing personal information, such as income and assets. Further welfare analysis shows that conspicuous consumption significantly increases the credit burden of the migrants, specifically, the average net present value of the credit burden of the migrants for purchasing automobile is 2533.28 yuan higher than that of the local residents. Furthermore, conspicuous consumption in the automobile market has also increased the purchase of gas guzzler, resulting in an increase in fuel consumption per 100 km of automobiles purchased by the migrants, which is equivalent to an increase of 1.226 tons of carbon dioxide emissions per vehicle during its lifetime. Overall, our findings have clear implication for understanding the consumption behavior of the migrants, reducing personal financial risk and promoting green consumption.

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