Do air pollution levels influence enforcement by regulators? Evidence from China
Abstract This paper examines the relationship between air pollution levels and regulators’ enforcement levels and observes that air pollution levels in firms’ locations reduce enforcement from regulators. Moreover, regulators are more likely to suffer from type II errors when air pollution levels in...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Springer
2023-12-01
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| Series: | Management System Engineering |
| Subjects: | |
| Online Access: | https://doi.org/10.1007/s44176-023-00023-6 |
| _version_ | 1797376808409104384 |
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| author | Chaofan Li Pin Zhou |
| author_facet | Chaofan Li Pin Zhou |
| author_sort | Chaofan Li |
| collection | DOAJ |
| description | Abstract This paper examines the relationship between air pollution levels and regulators’ enforcement levels and observes that air pollution levels in firms’ locations reduce enforcement from regulators. Moreover, regulators are more likely to suffer from type II errors when air pollution levels in firms’ locations are higher, verifying the effect of regulators’ unwillingness to travel due to air pollution. The cross-sectional analysis suggests that enforcement from regulatory authorities in areas with lower air pollution levels than in firms’ locations, positioned at great distances from firms’ locations, and with greater workloads is less strict when air pollution levels in firms’ locations are higher. We further test whether air pollution levels reduce the efficiency of regulators and find that firms with lower earnings quality and weaker corporate governance are less likely to be subjected to enforcement by regulators when air pollution levels in the firms’ locations are higher. |
| first_indexed | 2024-03-08T19:43:56Z |
| format | Article |
| id | doaj.art-e279a268cca141a8aca4d0d3a584df9e |
| institution | Directory Open Access Journal |
| issn | 2731-5843 |
| language | English |
| last_indexed | 2024-03-08T19:43:56Z |
| publishDate | 2023-12-01 |
| publisher | Springer |
| record_format | Article |
| series | Management System Engineering |
| spelling | doaj.art-e279a268cca141a8aca4d0d3a584df9e2023-12-24T12:29:42ZengSpringerManagement System Engineering2731-58432023-12-012111310.1007/s44176-023-00023-6Do air pollution levels influence enforcement by regulators? Evidence from ChinaChaofan Li0Pin Zhou1School of Management, Wuhan University of TechnologySchool of Economics & Management, Huazhong Agricultural UniversityAbstract This paper examines the relationship between air pollution levels and regulators’ enforcement levels and observes that air pollution levels in firms’ locations reduce enforcement from regulators. Moreover, regulators are more likely to suffer from type II errors when air pollution levels in firms’ locations are higher, verifying the effect of regulators’ unwillingness to travel due to air pollution. The cross-sectional analysis suggests that enforcement from regulatory authorities in areas with lower air pollution levels than in firms’ locations, positioned at great distances from firms’ locations, and with greater workloads is less strict when air pollution levels in firms’ locations are higher. We further test whether air pollution levels reduce the efficiency of regulators and find that firms with lower earnings quality and weaker corporate governance are less likely to be subjected to enforcement by regulators when air pollution levels in the firms’ locations are higher.https://doi.org/10.1007/s44176-023-00023-6Environment managementAir pollutionEnforcementType II errorsGeographical distance |
| spellingShingle | Chaofan Li Pin Zhou Do air pollution levels influence enforcement by regulators? Evidence from China Management System Engineering Environment management Air pollution Enforcement Type II errors Geographical distance |
| title | Do air pollution levels influence enforcement by regulators? Evidence from China |
| title_full | Do air pollution levels influence enforcement by regulators? Evidence from China |
| title_fullStr | Do air pollution levels influence enforcement by regulators? Evidence from China |
| title_full_unstemmed | Do air pollution levels influence enforcement by regulators? Evidence from China |
| title_short | Do air pollution levels influence enforcement by regulators? Evidence from China |
| title_sort | do air pollution levels influence enforcement by regulators evidence from china |
| topic | Environment management Air pollution Enforcement Type II errors Geographical distance |
| url | https://doi.org/10.1007/s44176-023-00023-6 |
| work_keys_str_mv | AT chaofanli doairpollutionlevelsinfluenceenforcementbyregulatorsevidencefromchina AT pinzhou doairpollutionlevelsinfluenceenforcementbyregulatorsevidencefromchina |