Local Government Competition, Environmental Regulation and the Investment Efficiency of High Energy-Consuming Enterprises
He Du 1,2
More details
Hide details
School of Finance and Economics, Wuxi Institute of Technology, Wuxi, Jiangsu 214121, China
School of Business, Nanjing University, Nanjing, Jiangsu 210093, China
China Three Gorges International Corporation, Hongkong 999077, China
Zhejiang Gongshang University Hangzhou College of Commerce, Hangzhou, Zhejiang 311599, China
Hangzhou Institute of Development Planning, Hangzhou, Zhejiang 310026, China
Irvine Valley College, CA 92618, USA
Submission date: 2023-05-22
Final revision date: 2023-10-27
Acceptance date: 2023-11-08
Online publication date: 2024-02-19
Publication date: 2024-03-18
Corresponding author
Jiale Yan   

Irvine Valley College, CA 92618, USA
Pol. J. Environ. Stud. 2024;33(3):2571-2586
The behaviors of local governments can affect the enforcement of environmental regulations. Environmental regulation can influence the behaviour of energy-intensive enterprises. This paper examines the relationship between local government competition, environmental regulation and the investment efficiency of high energy consuming firms using a basic panel regression and moderating effects model based on data from 2011-2020 for high energy consuming firms in China. The paper found that local government competition and environmental regulation can promote increased investment efficiency in energy-intensive firms in the short term. However, environmental regulation is not beneficial to investment efficiency in the long run. Local government competition plays a positive moderating role in the impact of environmental regulation on the investment efficiency of high energy consuming firms. There is a threshold effect on the role of local government competition. When the level of government competition exceeds 2.097, it has a negative impact on the investment efficiency. We further test for heterogeneity and we find that this promotion effect is also more obvious in areas with high environmental taxes and low marketability. Finally, we provide constructive suggestions for the development of government and the improvement of the investment efficiency of high energyconsuming firms.
Journals System - logo
Scroll to top