Mitigating boundary pollution: Evidence from China's environmental protection inspection centers

Abstract

The efficacy of a vertical environmental protection system in managing transboundary pollution has not been extensively explored. Through a quasi-natural experiment facilitated by China's six environmental protection inspection centers (EPICs), this study assesses their impact on boundary pollution intensity and compares it with their effect on non-boundary pollution intensity. The findings demonstrate that the institution of EPICs significantly mitigates the intensity of boundary pollution, with a more pronounced reduction effect compared to non-boundary areas. Analysis of mechanisms reveals that both boundary and non-boundary enterprises achieve a reduction in pollution intensity through the enlargement of production capacities, enhancement of investments in pollution control, and a decrease in total pollution emissions. Given that boundary enterprises exhibit a greater magnitude in reducing total pollution emissions, the resultant effect on pollution intensity reduction is more significant among these entities. Furthermore, heterogeneity analysis indicates that the impact of EPICs on reducing pollution intensity is more substantial among samples with minimal political connections, elevated political incentives, and within heavily polluting industries, with boundary enterprises experiencing a more pronounced influence. This article unveils that strengthening coordination between central and local authorities, alongside fostering corporate actual investment in environmental protection, serves as pivotal mechanisms, offering innovative strategies for global environmental governance and advancing both the practice and theory of sustainable development.