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Is itmore effective for national regulators to go directly to the city level to enforce environmental laws?
آیا تنظیم مقررات ملی برای اجرای قوانین محیط زیست مستقیماً به سطح شهر مؤثر است؟-2020 We examine the effectiveness of a new approach of using a direct inspection program on all environmental laws
on the firm-level environmental investment in China. The direct inspection programis a response to the continued
pollution issues despite the increased effort in the actions of regulatory agencies and their agents. Our findings
suggest that firms located in direct inspection cities perform better than those located in non-direct
inspection cities in terms of environmental investments. The findings are robust to a battery of robustness checks.
Using dynamic analysis, we find that the effect of the direct inspection programlasts at least two years. Our further
analysis shows that firms in direct inspection cities respond better to environmental enforcement and nonstated
owned firms receive more subsidies than firms in non-direct inspection program cities. The major take
away from our analysis is that, in emerging economies, it is more effective to go directly to the city level to enhance
the actions of regulatory agencies and their agents. Cutting layers of agencies can enhance firm-level environmental
investment. Keywords: Direct inspection | Environmental actions of regulatory agencies | Layer of regulatory agencies | Environmental investment |
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