Government relocation and air pollution: Evidence from China

Abstract

In the pursuit of sustainable economic development, many cities have initiated the relocation of government offices as a strategy to optimize resource allocation. This study examines the environmental impacts of local government relocations in China between 1999 and 2016, with a focus on PM2.5 concentration data in the areas surrounding the relocation sites. Utilizing a difference-in-differences estimation approach, our findings indicate that (1) relocating local government offices significantly reduces pollution levels in nearby areas, with more pronounced effects closer to the relocation site; (2) environmental quality improvements intensify over time before stabilizing; (3) the relocation reform enhances the overall environmental quality of the entire city; and (4) government site relocations ultimately lead to regional environmental quality improvements by fostering the development of clean industries and reducing industrial pollution emissions. These results underscore the policy significance of green development principles and the spatial optimization of public resources.