Power transitions and pollution reduction: Decoding the impact of municipal leadership changes on firm-level pollution in China.

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]