@article{85f87904cc7d4cff96986e72e1486027,
title = "Fine me if you can: Fixed asset intensity and enforcement of environmental regulations in China",
abstract = "Why do some firms face more environmental regulatory actions than others? We present a theory focusing on firm-fixed asset intensity. High fixed asset intensity makes a firm less mobile. A less mobile firm cannot present a credible exit threat, making it more susceptible to stringent enforcement. Analysis of key-monitored firms in Jiangsu province, China of 2012–2014 shows that higher fixed asset intensity is associated with more pollution levies and a higher chance of receiving a punitive action. This result holds in a battery of robustness checks and an instrumental variable analysis. Furthermore, our 2018 online survey of Chinese firm managers shows that those from high fixed asset intensity firms indeed consider their firms less mobile and they pay more environment-related operating costs. Finally, data from 2004 Chinese Firm-Level Industrial Survey demonstrate that fixed asset intensity is positively associated with pollution levies in a national sample of 201,926 manufacturing firms.",
author = "Xun Cao and Qing Deng and Xiaojun Li and Zijie Shao",
note = "Funding Information: Authors are in alphabetical order, equal contributions implied. Earlier versions were presented at the Symposium “Data, Technology and Digitalization & Environmental Governance in China,” Hanover, Germany (May 28–30, 2018), the Forth Conference on Environmental Politics & Governance, Stockholm, Sweden (June 29–30, 2018), the Forth Workshop on Chinese Politics & Society, Shanghai Jiao Tong University, Shanghai, China (July 7–8, 2018), the Workshop on the Paris Agreement and the Future of Climate Policies, Sun Yat‐sen University, Guangzhou, China (September 14–15, 2018), the 2018 IPES Conference at MIT, Cambridge (November 2–3, 2018), and the QCSS‐3 workshop at New York University, New York (April 25, 2019). We thank all conference participants for their helpful comments. Shao's research is supported by the Fundamental Research Funds for the Central Universities. Online Appendix of this article can be found at: https://sites.psu.edu/xuncao/files/2021/04/asset_reg_0216_2021_app.pdf . Publisher Copyright: {\textcopyright} 2021 John Wiley & Sons Australia, Ltd.",
year = "2021",
doi = "10.1111/rego.12406",
language = "English (US)",
journal = "Regulation and Governance",
issn = "1748-5983",
publisher = "Wiley-Blackwell",
}