Do Firms That Are Disadvantaged by Unilateral Climate Policy Receive Compensation? Evidence from China’s Energy-Saving Quota Policy
Abstract
:1. Introduction
2. Literature Review
3. Research Design
3.1. Energy-Saving Quota Policy
3.2. Four Inequities Induced by the ESQP
3.3. Compensatory Policies and Their Measurements
3.4. Methods and Variables
3.4.1. Difference-in-Differences Model
3.4.2. Propensity Score Matching
3.4.3. Procedures for Testing Compensation for Inequities Ⅱ~Ⅳ
3.5. Data
4. Results and Discussions
4.1. Average Compensation Received by ESQP-Regulated and Unregulated Firms
4.2. Compensation for Inequity Ⅰ between Regulated and Unregulated Firms
4.3. Compensation for Inequities II–IV among Regulated Firms
4.4. Effects of Other Characteristics of Firms on Compensation
5. Conclusions and Inspiration
5.1. Conclusions
5.2. Practical Inspiration
Author Contributions
Funding
Conflicts of Interest
References
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Variables | Definitions | 2010 | 2013 | |||
---|---|---|---|---|---|---|
Control | Treated | Control | Treated | |||
outcome variables | subsidy | log of subsidy income (CNY) | 5.490 | 4.688 | 5.104 | 7.270 |
financial expense ratio (%) | financial expense to total liability | 3.332 | 3.120 | 5.432 | 4.405 | |
tax rate (%) | (sum of income tax, value-added tax and business tax) to main business revenue | 1.280 | 1.357 | 1.685 | 1.651 | |
control variables | lnoutput | log of total output | 12.460 | 12.780 | 12.550 | 13.340 |
age | 2013—founding year | 18.750 | 20.300 | 22.260 | 23.170 | |
lnlabor | log of number of employees | 5.446 | 6.304 | 6.157 | 6.667 | |
tfp | total factor productivity calculated using Solow’s productivity residua | 2.866 | 1.330 | 2.052 | 1.494 | |
lncapital | log of the ratio of total fixed assets to the number of employees | 4.069 | 4.749 | 4.422 | 5.238 | |
lnexports | log of exports | 2.999 | 3.084 | 3.591 | 3.456 | |
loa | ratio of total liabilities to total assets | 0.630 | 0.652 | 0.550 | 0.602 | |
soa | ratio of revenue to total assets | 5.583 | 8.259 | 2.319 | 1.771 | |
deficit | 1 for a negative profit and 0 otherwise | 0.096 | 0.122 | 0.147 | 0.219 | |
state-own | 1 for state-owned firms and 0 otherwise | 0.054 | 0.067 | 0.033 | 0.046 | |
foreign-own | 1 for foreign firms and 0 otherwise | 0.200 | 0.131 | 0.185 | 0.123 | |
HKMT-own | 1 for firms belonging to a parent company in Hong Kong, Macao, and Taiwan and 0 otherwise | 0.113 | 0.100 | 0.116 | 0.097 | |
lnpgdp | log of per capita GDP in each province of China | |||||
lnfiscal | log of fiscal revenue per unit land area in each province of China | |||||
matching variables | lnoutput | log of total output | 12.460 | 12.780 | ||
state-own | 1 for state-owned firms and 0 otherwise | 0.054 | 0.067 | |||
lnassets | log of total assets | 11.160 | 11.540 | |||
subsidy2008 | log of subsidy income in 2008 | 2.110 | 2.443 | |||
tax rate 2008-10 (%) | average of tax rate during 2008–2010 | 1.296 | 1.516 |
Subsidized Firms | Average Subsidy Income of Subsidized Firms (CNY 104) | Subsidy | Financial Expense Ratio (%) | Tax Rate (%) | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Control | Treated | Control | Treated | Control | Treated | Control | Treated | Control | Treated | |
2010 | 3034 | 2017 | 224 | 692 | 5.490 | 4.688 | 3.332 | 3.120 | 1.280 | 1.357 |
2011 | 2997 | 4012 | 154 | 364 | 4.558 | 6.058 | 5.162 | 4.098 | 2.012 | 3.298 |
2012 | 3219 | 4466 | 267 | 657 | 5.147 | 7.185 | 6.066 | 4.747 | 3.500 | 3.654 |
2013 | 3201 | 4489 | 269 | 604 | 5.104 | 7.270 | 5.432 | 4.405 | 1.685 | 1.651 |
Subgroup | Sample Size | Subsidy Income (CNY 104) | Financial Expense Ratio (%) | Tax Rate (%) |
---|---|---|---|---|
high-burden firms | 761 | 492 | 2.891 | 2.529 |
low-burden firms | 5428 | 218 | 4.824 | 2.673 |
“complete” firms | 452 | 465 | 4.526 | 2.673 |
“incomplete” firms | 5737 | 358 | 5.212 | 2.395 |
state-owned firms | 385 (in 2012) 284 (in 2013) | 1070 | 2.355 | 5.631 |
private firms | 5804 (in 2012) 5905 (in 2013) | 424 | 4.702 | 2.482 |
exporting firms | 1841 (in 2012) 1816 (in 2013) | 901 | 3.254 | 2.135 |
non-exporting firms | 4348 (in 2012) 4373 (in 2013) | 270 | 5.130 | 2.872 |
Subsidy | Financial Expense Ratio | Tax Rate | |
---|---|---|---|
treat×time (the ESQP) | 0.677 (0.043) *** | −0.280 (0.578) | −0.306(0.096) *** |
lnoutput | 0.125 (0.025) *** | −1.476 (0.334) *** | −0.138(0.055) ** |
lnasset | −0.097 (0.036) *** | −1.267 (0.484) *** | 0.590 (0.080) *** |
age | −0.002 (0.002) | −0.001 (0.020) | 0.002 (0.003) |
lnlabor | −0.131 (0.034) *** | 1.070 (0.455) ** | −0.018 (0.075) |
tfp | −0.001 (0.001) | 0.004 (0.017) | −0.002 (0.003) |
lncapint | −0.152 (0.024) *** | 0.921 (0.317) *** | 0.170 (0.053) *** |
lnexports | 0.011 (0.007) | 0.075 (0.089) | −0.036 (0.015) ** |
loa | 0.003 (0.011) | −0.572 (0.148) *** | −0.047 (0.025) * |
soa | −0.001 (0.001) | −0.001 (0.007) | 0.001 (0.001) |
deficit | −0.158 (0.049) *** | −0.493 (0.655) | −0.852 (0.109) *** |
state-own | −0.046 (0.128) | −0.560 (1.733) | 0.790 (0.287) *** |
foreign-own | −0.049 (0.155) | 0.512 (2.094) | 0.222 (0.347) |
HKMT-own | 0.030 (0.160) | 0.098 (2.159) | 0.298 (0.358) |
lnpgdp | −5.317 (0.528) *** | 16.860 (7.126) ** | −0.210 (1.180) |
lnfiscal | 2.615 (0.330) *** | −6.434 (4.452) | 0.593 (0.737) |
_cons | 22.220 (−1.718) *** | −59.64 0(−23.180) ** | −9.961 (−3.840) *** |
Number of obs | 49,512 | 49,512 | 49,512 |
Inequity | Independent Variables | Subsidy | Financial Expense Ratio | Tax Rate | Subsidy Intensity |
---|---|---|---|---|---|
Inequity Ⅱ | ESB×ESQP | 0.593 *** | −3.395 *** | 0.025 | 0.254 *** |
(−0.086) | (−1.124) | (−0.182) | (−0.044) | ||
Inequity Ⅲ | complete×ESQP | 0.269 *** | −1.606 *** | −0.424 *** | 0.0530 ** |
(−0.043) | (−0.564) | (−0.091) | (−0.022) | ||
Inequity Ⅳ | state-own×ESQP | 0.433 *** | −0.850 | 0.561 * | 0.080 |
(−0.146) | (−1.906) | (−0.308) | (−0.074) | ||
export×ESQP (exporting or not) | 0.056 *** | −0.022 | −0.025 ** | 0.016 *** | |
(−0.005) | (−0.072) | (−0.012) | (−0.003) |
Two-Digit Sector | Subsidy | Financial Expense Ratio | Tax Rate |
---|---|---|---|
13-Food Processing | 1.062(0.207) *** | −2.539(1.889) | −0.901(0.907) |
14-Food Production | 0.562(0.337) * | −0.592(0.865) | −0.217(0.838) |
15-Beverage Industry | 0.573(0.269) ** | −2.237(1.998) | −0.66(0.682) |
16-Tobacco Industry | - | - | - |
17-Textile Industry | 0.131(0.129) | 0.609(0.988) | −0.175(0.222) |
18-Garments and Other Fibre Products | - | - | - |
19-Leather, Furs, Down and Related Products | - | - | - |
20-Timber Processing | - | - | - |
21-Furniture Manufacturing | - | - | - |
22-Papermaking and Paper Products | −0.002(0.173) | 0.677(0.599) | −0.511(0.361) |
23-Printing and Record Medium Reproduction | - | - | - |
24-Cultural, Educational and Sports Goods | - | - | - |
25-Petroleum Refining and Coking | 0.436(0.192) ** | −0.94(1.012) | −0.549(0.419) |
26-Raw Chemical Materials and Chemical Products | 0.946(0.114) *** | −0.018(1.020) | −0.252(0.206) |
27-Medical and Pharmaceutical Products | 0.601(0.343) * | 1.360(0.768) * | −1.045(0.662) |
28-Chemical Fibre | 0.769(0.347) ** | −0.024(0.223) | −1.065(0.286) *** |
29-Rubber Products | - | - | - |
30-Plastic Products | - | - | - |
31-Nonmetal Mineral Products | 0.948(0.105) *** | −0.776(1.530) | −0.206(0.256) |
32-Smelting and Pressing of Ferrous Metals | 0.651(0.132) *** | −0.517(0.967) | −0.184(0.214) |
33-Smelting and Pressing of Nonferrous Metals | 1.009(0.446) ** | −0.659(0.964) | 0.311(0.426) |
34-Metal Products | - | - | - |
35-Ordinary Machinery | 0.622(0.416) | −5.823(6.315) | −1.283(0.908) |
36-Special Purposes Equipment | - | - | - |
37-Transport Equipment | 1.507(0.350) *** | 0.275(0.441) | 0.296(0.716) |
39-Other Electronic Equipment | - | - | - |
40-Electric Equipment and Machinery | 0.777(0.413) * | −0.257(0.535) | 0.63(0.949) |
41-Electronic and Telecommunications | - | - | - |
42-Instruments and meters | - | - | - |
43-Waste Resources and Waste Materials Recycling and Processing Industry | - | - | - |
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Lin, W.; Chen, J.; Gan, J.; Dai, Y. Do Firms That Are Disadvantaged by Unilateral Climate Policy Receive Compensation? Evidence from China’s Energy-Saving Quota Policy. Sustainability 2022, 14, 15375. https://doi.org/10.3390/su142215375
Lin W, Chen J, Gan J, Dai Y. Do Firms That Are Disadvantaged by Unilateral Climate Policy Receive Compensation? Evidence from China’s Energy-Saving Quota Policy. Sustainability. 2022; 14(22):15375. https://doi.org/10.3390/su142215375
Chicago/Turabian StyleLin, Weiming, Jianling Chen, Jianbang Gan, and Yongwu Dai. 2022. "Do Firms That Are Disadvantaged by Unilateral Climate Policy Receive Compensation? Evidence from China’s Energy-Saving Quota Policy" Sustainability 14, no. 22: 15375. https://doi.org/10.3390/su142215375