Does industrial agglomeration promote or hinder environmental governance: evidence from a quasi-experiment on the establishment of development zones
China Industrial Economics,No. 12
Theoretically, the positive externalities of industrial agglomeration should be far greater than its negative externalities on environment. However, from a realistic point of view, industrial agglomeration seems to be accompanied by river pollution, smog and other environmental issues. Faced with the gap of theory and reality, we cannot help to ask whether industrial agglomeration promotes or hinders environmental governance. The existing literature not only failed to reach a consensus, but most of the research perspective stay in the city, industry and other macro level, there is little research on the micro mechanism of the above relationship. As China’s most typical industrial agglomeration areas, the development zones provide a good perspective to clarify the above issues. In this paper, the influence of industrial agglomeration on water environment is studied by using a quasi-experiment based on the accurate geographic information of the river water quality observation points and the development zones. It is found that after the establishment of the development zone, river water has deteriorated significantly, and BOD, ammonia and other pollutants are significantly increased. Further research using industrial enterprises’ database shows that after the establishment of the development zone, the enterprise scale expanded, and the new entrants are the main reason. The results of this paper show that industrial agglomeration can hinder environmental governance, and the environmental pollution is more and more embodied in concentrated emission of pollution enterprises in space. And strict control of new capacity in the heavy pollution industry, especially strict access conditions for new enterprises, is the effective way to solve the problem of environmental pollution. In this paper, we create a new perspective to explain the deterioration of the environment caused by industrial agglomeration, and provide a clear policy reference to achieve win-win development of agglomeration and ecological environment.
Fiscal decentralization and corporate tax incentives: an analysis from the perspective of competition among local governments
China Industrial Economics,No. 10
In this paper, we calculated corporate effective average tax rate (EATR) and effective marginal tax rate (EMTR) on the basis of the data on industrial enterprises above designated size and prefecture-level cities in China during 2000–2008 to depict corporate tax incentives and examine the influence of fiscal decentralization on corporate tax incentives. The research shows increasingly weakening corporate tax incentives and differential tax treatments among enterprises of different ownerships during the sample period, where the private enterprises had the highest effective tax rate. Fiscal revenue and expenditure decentralization has asymmetric effect on the corporate EATR: fiscal revenue decentralization may lead local governments to adopt low-tax competition to increase corporate tax incentives; fiscal expenditure decentralization may lead to high-expenditure competition strategy to weaken corporate tax incentives. Revenue and expenditure decentralization has very weak influence on corporate EMTR, indicating that the key foothold of tax competition and then tax incentives of local governments is to attract enterprises to enter, with little attention to corporate marginal investment. Vertical fiscal imbalance may make local governments shift expenditure cost through common pool channels, which may lead to decreasing EATR and weak effect on EMTR. The tax competition of local governments significantly varies among enterprises with different ownerships, where private enterprises suffer significant policy prejudice.
Can high-speed rail construction reshape the layout of China’s economic space: from the perspective of regional heterogeneity of employment, wage and economic growth
China Industrial Economics,No. 10
Based on the new economic geography theory, the article embeds high-speed rail construction factors into the research framework of space economic organization, and uses the PSM-DID method to carry out an empirical test. The results show that, at the national level, the indirect negative effect of high-speed rail construction on wage and economic growth generated by employment effects is less than the direct positive effect, and the total effect of high-speed rail construction on the wages and economic growth is significantly positive, with the elasticity coefficients being 0.2067, 0.1907 and 0.1491. In different regions and cities of different scale, the construction of high-speed rail significantly enhance employment in large cities with high speed rail in the eastern and central regions, especially the large high-speed rail city’s construction industry and high value-added manufacturing industries in the eastern regions and the small high-speed rail city’s employment of manufacturing industries and consumer services in the central area. Productivity growth effects of high-speed railway construction in the eastern large-scale high-speed rail cities exceed the effect of convenience of inhabitants, and it shows that the indirect effects of high-speed rail construction on the region’s wage and economic growth generated by jobs are positive, while the corresponding indirect effect is negative in medium- and small-sized high speed cities in central and western China. Overall, the construction of high-speed rail mainly expands the wage gap between the large high-speed rail cities and cities without high-speed rail in eastern China, and expands the eastern medium-sized cities’ economic growth gap between the high-speed rail and no high-speed rail cities. The result confirms the correctness of the theory of reasoning, that is, high-speed rail construction directly or indirectly affect employment, wage and economic growth of an area, reshape the economic space, which provides the basis for the region by means of high-speed rail to further promote regional employment and economic growth, and to develop relevant policies according to local conditions.
Distance to the technology frontier and the innovation effect of scientific research: whether basic research or applied research plays a more important role
China Industrial Economics,No. 03
When China’s total expenditure on scientific research is now among the top of the world, and its overall scientific and technological level is close to the world frontier (decreasing distance to technology frontier), its investment orientation in R&D (toward application research or basic research) is important to determine the industrial innovation to a large extent. This paper testifies from both theoretical and empirical aspects that there objectively exists an optimal distance to technology frontier. When the technology distance to frontier is shorter than the optimal one, long-run high investment in application research will inhabit industrial innovation; in contrast, long-run high investment in basic research will enhance the ability of innovation among Chinese enterprises and reverse diminishing marginal negative effect of application research to industrial innovation by narrower the optimal gap between Chinese technology and the world frontier. The policy implication is that when the development of Chinese industries are at a historic turning point, only by continuously investing in basic research can help to make China’s industrial innovation transform from imitative innovation to independent innovation.
China Industrial Economics,No. 04
By adopting the multiple case study method and taking the standard model of strategic choice as a theoretical lens, this study analyzes processes of four Chinese IT service providers’ operational capabilities development and strategic choices to uncover mechanisms and rationales of different emotional roots’ impacts on strategic choices. The findings are as follows: when IT service suppliers have positive emotional roots, they prefer to choose exploratory strategies; otherwise, they prefer to select exploitative strategies. In addition, IT service providers’ emotional roots affect strategic choices by influencing operational capabilities development. Specifically, variant emotional roots firstly direct organizational attention, then impact on operational capabilities development which consists of two sub-processes, namely, “constructing routines” and “assembling capabilities,” and finally the emotional roots influence the strategic choices. Theoretical contributions lie in that this study defines and operationalizes a concept of “emotional roots” as well as explores how individual emotions influence organizational strategic choices and capabilities development from a perspective of IT service suppliers. As for the managerial implications, IT service suppliers need to take into consideration the impact of emotional roots on strategies in order to make effective strategic choices when they are facing turbulent environment.