Search

This research examines the influence of political system changes, particularly official turnover, on pollution reduction in Chinese industrial firms—a response to the environmental challenges posed by China's economic growth. Utilizing micro-panel data from 2000 to 2014 and an official turnover database, this study assesses how these turnovers affect firm-level pollution. The analysis confirms that official turnovers significantly reduce emissions, with the effect more pronounced in non-state-owned enterprises, under officials who are male, hold PhDs, and are older. This impact is also stronger in areas with a larger tertiary sectors and higher economic growth. A detailed comparison reveals that mayoral turnovers have a greater abatement effect than those of municipal secretaries, especially in cases of abnormal turnovers. Crucially, this study demonstrates that mayoral turnovers lead to pollution reduction by promoting corporate exports and innovation. The baseline regression results, confirmed as robust after extensive robustness checks, underscore the significance of these findings. This paper sheds light on the political dynamics of environmental governance in China, advocating bureaucratic reforms to reduce emissions and providing strategic recommendations to improve national environmental sustainability. • Political turnover in China leads to significant pollution reduction in industrial firms. • The effect of official turnovers on reducing emissions is more pronounced in non-state-owned enterprises. • Turnover effects are stronger under older, male officials with PhDs. • Mayoral changes have a greater impact on pollution reduction than municipal secretaries, particularly in abnormal turnovers. • Mayor turnovers contribute to pollution reduction by promoting exports and innovation in firms. [ABSTRACT FROM AUTHOR]

The persistent issue of industrial pollution in China's environment has prompted industrial firms to explore new opportunities for addressing this problem through the rapid growth of financial technology (fintech). In this study, we construct a city-level fintech index using Baidu News Advanced Search and combine it with Chinese industrial firm data from 2004 to 2014, along with other city-level data, to empirically explore how fintech affects firm pollution. Our baseline results show that fintech can significantly reduce firm pollution discharges, more precisely, a 1% increase in fintech is associated with a reduction in firm pollution by 0.062%. The robustness of our findings has been confirmed through various strategies. We have identified the underlying mechanisms of fintech's impact on firm pollution discharges and confirmed that it significantly reduces such discharges through export competitiveness, environmental protection investment, and technological innovation. Furthermore, we investigate the heterogeneous effects of fintech development and find that it leads to more pronounced reductions in pollution discharges for firms with older age, for firms with larger scale, for non-state-owned firms, for firms located in both the eastern and western regions, for firms located in the areas with a higher level of competition among banks and those located in the areas with a higher level of economic growth. However, the development of the tertiary sector significantly weakens the reduction effect of fintech on firm pollution discharges. Our research provides theoretical support for exploring emerging and viable approaches to mitigating firm pollution from a financial perspective and offers promising implications for harnessing the positive externalities of fintech. [ABSTRACT FROM AUTHOR]