The impact of government-enterprise collusion on environmental pollution in China

Pollution emissions in China are associated with the relationship between local governments and enterprises, especially in those cities with government-enterprise collusion (GEC). We evaluate the causal relationships between GEC and SO2 emissions at the enterprise level, by adopting the Propensity Score Matching-Difference in Difference method from a comprehensive environmental database. The empirical results show that, compared with those in the cities without collusion, SO2 emissions of enterprises in the colluded cities increase by 11.3% (95% Confidence Interval (CI): 0.041-0.186). These GEC effects are more substantial in the cities whose regional officials work with longer terms, in the foreign-owned or small-scale enterprises, and the labour-intensive industries. The findings suggest the existing environment and personnel management policies in China should be adjusted for more sustainable development.

Automated summary

The study found that collusion between government and enterprises has a significant impact on SO2 emissions, especially in cities with longer terms for regional officials, foreign-owned or small-scale enterprises, and labor-intensive industries. Adjustments to existing environment and personnel management policies in China are needed for more sustainable development.