The Size Distribution of Firms and Industrial Water Pollution: A Quantitative Analysis of China

• 成果类型: Article
• 署名作者: Qi, Ji; Tang, Xin; Xi, Xican
• 署名单位: Chinese Academy of Environmental Planning; Wuhan University; International Monetary Fund; Fudan University; Shanghai Institute of International Finance & Economics
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20180227
• 发表日期: 2021
• 页码: 151-183
• 关键词: aggregate productivity; general equilibrium; INTERNATIONAL-TRADE; emission taxes; misallocation; environment; TECHNOLOGY; distortions; STANDARDS; DYNAMICS

摘要

We argue that misallocation across firms amplifies industrial water pollution by distorting the firm size distribution in China. Firm-level data indicate that larger firms are more likely to use clean technology but face higher distortions. In a heterogeneous firms model with an endogenous choice of pollution treatment technologies, we show that distortions that increase with firm-level TFP lower the adoption of clean technology, amplify aggregate pollution intensity, and lower aggregate output. Quantitatively, eliminating these correlated distortions would increase output by 30 percent and decrease pollution by 20 percent. Meanwhile, environmental regulations have sizable impact on pollution but limited effects on aggregate output.