Does Environmental Regulation Shape Entrepreneurship?

被引:0
作者
Dongmin Kong
Ni Qin
机构
[1] Huazhong University of Science and Technology,Dongmin Kong, School of Economics
[2] Huazhong University of Science and Technology,Ni Qin, School of Economics
来源
Environmental and Resource Economics | 2021年 / 80卷
关键词
Environmental regulation; Entrepreneurship; China; Natural experiment;
D O I
暂无
中图分类号
学科分类号
摘要
This study investigates the causal effect of environmental regulation on entrepreneurship. By using China’s Two Control Zones policy in 1998 as an exogenous shock and a novel dataset about firm creation, our difference-in-differences-in-differences estimation shows that environmental regulation significantly deters entrepreneurship in pollution-intensive industries. Our results are robust to a series of endogeneity and robustness tests. A plausible mechanism is that the stringent regulation increases firm’s production costs, thus reducing expected profits and crowding out entrepreneurship. Moreover, we find that environmental regulation has a sizable and statistically significant effect only on entrepreneurship in areas with low corruption, high institutional quality, as entrepreneurs can hardly evade regulations through rent-seeking activities or other means.
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页码:169 / 196
页数:27
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