Speaker: Zhang Peng, assistant professor, Chinese University of Hong Kong

Date:  June 14, 2023

Time: 10:00-11:00

Location: B423, Zhixin Building, Central Campus

Sponsor: The School of Mathematics, Shandong University

Abstract:

Measuring environmental regulation's effect on firm competitiveness is central to designing optimal policies. Existing studies document significant negative effects of air pollution regulations on manufacturing competitiveness as measured by total factor productivity (TFP). A separate literature finds that air pollution lowers TFP through its ambient effect on workers’ physical and mental health and cognition. Extant empirical measures of the competitiveness effect reflect both. We develop a boundary -discontinuity -difference -indifferences (BD-DD) approach to isolate the competitiveness effect: only regulated firms suffer the competitiveness effect but both regulated and unregulated firms adjacent to each other enjoy the ambient effect via spillovers. We apply the approach to a major air pollution regulation in China. The traditional approach to estimating the regulation's effect yields a 3. 8% TFP decline at a total cost of CNY 30. 2 billion annually. The true competitiveness effect is 6.4% (51.6billion). The implied ambient effect is 2.6% (21.4 billion)among regulated firms. While difficult to quantify, proximate unregulated firms also enjoy the ambient effect.

For more information, please visit:

https://www.view.sdu.edu.cn/info/1020/180949.htm