Green regulation, trade friendliness, and local policy adaptation

A-Tier
Journal: Journal of Environmental Economics and Management
Year: 2026
Volume: 135
Issue: C

Authors (3)

Du, Xinming (not in RePEc) Qin, Yu (National University of Singapo...) Xie, Yu (not in RePEc)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper examines the impacts of national policies on local policy formulation by studying the interplay between a top-down environmental regulation and the local Foreign Direct Investment (FDI) policies. We compiled a database of prefecture-level FDI policies in China spanning four decades and leveraged the Two Control Zones (TCZ) policy that designated some prefectures for pollution abatement. A difference-in-differences analysis shows that the TCZ designated cities formulated more friendly FDI policies after the TCZ policy. Mechanism analyses suggest that local governments loosen FDI regulations to offset economic costs of environmental regulation and attain political promotion.

Technical Details

RePEc Handle
repec:eee:jeeman:v:135:y:2026:i:c:s0095069625001469
Journal Field
Environment
Author Count
3
Added to Database
2026-01-29