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Central transfer payment for the key ecosystem zones has become the most funded payments for ecosystem services program in China. The ecological fiscal transfer (EFT) aims to improve the eco-environmental quality of the targeted counties by providing supplementary fiscal funds, though not strictly specifying the usage. This study employs a time-varying difference-in-difference strategy to investigate the impact of EFT on environmental outcome by using a comprehensive county-level dataset covering 1949 counties from 2004 to 2015. Estimates show that the policy had a positive impact on local air quality, whereas the dynamic effect is diminishing. The policy effect is achieved through more stringent environmental regulation and stricter industrial access. Reduction of industrial dust emission is more noticeable than that of sulfur dioxide. There is an economic scale effect that the scale of a county can increase effectiveness of EFT on air quality improvement, whereas an opposite development stage effect will undermine its effectiveness. Heterogeneities were detected concerning transfer intensity, intervention period, geographical region, and ecosystem type. These findings facilitate a deep understanding how EFT could play a significant role in protecting local environment in large developing countries. Several policy implications are drawn to enhance the effectiveness of the largest EFT program. • Ecological fiscal transfer is an emerging instrument in combating eco-environmental degradation. • China's ecological fiscal transfer (EFT) is taken as a quasi-experiment to evaluate its effectiveness. • A time-varying DID technique is employed by using unique county-level datasets. • China's EFT is effective in improving local air quality with a diminishing dynamic effect. • Various heterogeneities of effect were detected and impact mechanisms were identified. [ABSTRACT FROM AUTHOR]

China has experimented with a wide range of policies to encourage firms to improve their environmental performance, often with mixed results. This paper investigates the effectiveness of combining two different policies at the same time: (1) a more centralised environmental inspection process and (2) new rules on the public disclosure of policy compliance for firms wanting to undertake an initial public offering (IPO). A theoretical framework predicts that a more centralised inspection and public disclosure should improve both a firm's environmental performance and profitability. The results of instrumental variable estimations for 536 listed Chinese firms for the period 2009 to 2019 confirm the theoretical predictions although the positive effect on profitability only lasts for two years after compliance with the IPO requirements. An investigation into possible mechanisms shows that the joint policy promotes investment in green projects while also increasing demand for the firm's products. The findings highlight greater regulatory complexity may be needed if a country wishes to change the behaviour of firms in a manner that is consistent with overcoming environmental challenges. [ABSTRACT FROM AUTHOR]

Solid waste can cause serious environmental and ecological damage. However, the capital market attitude towards solid waste treatment policies remains unclear. Using an event study method, this paper examined the stock price reactions in Chinese listed firms in pilot construction and demolition waste (C&DW) treatment cities after the policy implementation and found that the pilot city firm stock prices were significantly and negatively affected, with this response being more negative when the firm had not previously been under environmental policy supervision. The cross-sectional analyses indicated that pilot city C&DW stock and treatment capacities, the proportion of state-owned shares, and the firms' political connections all negatively affected market reactions. The study of the capital market signaling effects towards solid waste policies can provide timely assistance to firms that need to adjust their strategic deployment. [ABSTRACT FROM AUTHOR]