Do different decentralization reforms prohibit or inhibit Chinese corporate carbon emission intensities?

Abstract

Decentralization reforms have changed both the constraints and decision-making objectives of local governments, which may affect the carbon emission behaviors of enterprises within their jurisdictions. In this study, Chinese industrial enterprises from 2001 to 2010 were selected as the research sample, and two reforms of province-managing-county and county power expansion were used as quasi-natural experiments. The impact of different decentralization reforms on the carbon emission intensity of enterprises was analyzed using the difference-in-differences method. The empirical results show that fiscal decentralization can inhibit the carbon emission intensity of enterprises, and the reduction of enterprise energy consumption and the increase of green investment are the action channels. Administrative decentralization can promote the carbon emission intensity of enterprises; increasing enterprise energy consumption, decreasing energy utilization efficiency, expanding production scale, and decreasing green investment are the action channels. The results of heterogeneity analysis show that the impact of both types of decentralization reforms on the carbon emission intensity of different enterprises differs significantly; this is caused by differences in the ownership type, the emission intensive level, and the level of environmental regulation in the region they are located. The findings of this study help to better understand the relationship between government decentralization and corporate carbon emission behaviors.