Abstract
This paper looks at the relationship between enterprise size and pollution abatement costs using firm-level datasets in China, where size-dependent distortions may exist in the distribution of enterprises of different sizes. We find that the pollution abatement costs decrease with enterprise size. Compared to the smallest size, the magnitudes of marginal decreases in pollution abatement costs per 1000 CNY of industrial output in the largest size are 3.29 CNY, 0.54 CNY and 2.60 CNY for gas, SO2 and dust, respectively. Moreover, we further explore the potential mechanisms for the decrease of pollution abatement costs from three perspectives: environmental protection-related investment, regulation intensity, and technological capability. Our findings suggest that the decrease in the intensity of environmental protection-related investment for large enterprises may be directly reduce the intensity of pollution abatement costs. Although large enterprises have low intensity of pollution abatement costs, this does not mean that they are subject to weaker environmental regulation. More importantly, we find that large enterprises may have more adoption of abatement technologies. For SO2 and dust, the pollutant removal efficiency of the largest enterprises is 4.92% and 1.82% higher than that of the smallest enterprises, respectively. Our results are robust to different specifications. These findings help us enact appropriate policies for enterprises based on their size, thereby improving the efficacy of pollution abatement and achieving the optimal level of pollution abatement for the entire society.
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Notes
Following are the statistical classification criteria for micro, small, medium, or large enterprises. We use X and Y to indicate the number of employees and annual revenues (10 thousand yuan) of the enterprise, respectively. When X < 20 and Y < 300, the enterprise belongs to a micro enterprise; when 300 > X ≥ 20 and 2,000 > Y ≥ 300, it belongs to a small enterprise; when 1,000 > X ≥ 300 and 40,000 > Y ≥ 2,000, it belongs to a medium enterprise; when X ≥ 1,000 and Y ≥ 40,000, then it belongs to a large enterprise.
For example, we assume that enterprises have zero pollution abatement costs when their generation and emissions of pollutants are equivalent, indicating that they have not treated the pollutants.
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QW: Conceptualization, Methodology, Writing-original draft. XF: Writing-Reviewing and Editing. BZ: Conceptualization, Writing-Reviewing and Editing.
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Appendix
Appendix
The pollution abatement costs per 1000 CNY of industrial output by six enterprise size: based on the industry output.
Notes: Panel a–c reports the average increment effects by enterprise size on the pollution abatement costs per 1000 CNY of industrial output for gas, SO2 and dust, respectively
The pollution abatement costs per 1000 CNY of industrial output by four enterprise size: based on the number of employees.
Notes: Panel a–c reports the average increment effects by enterprise size on the pollution abatement costs per 1000 CNY of industrial output for gas, SO2 and dust, respectively
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Wang, Q., Fan, X. & Zhang, B. Who will Spend more Pollution Abatement Costs: does Size Matter?. Environmental Management 73, 985–1004 (2024). https://doi.org/10.1007/s00267-024-01937-x
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DOI: https://doi.org/10.1007/s00267-024-01937-x