Study On The Impact Of Local Fiscal Expenditure On Industrial Pollution In China

Environmental pollution seriously restricts the sustainable development of China‘s society and economy.The report of the 19 th National Congress of the Communist Party of China points out: ?Promote green development and focus on solving prominent environmental problems?.Because the good ecological environment has the property of public goods,the free competition market is difficult to provide the environmental public goods that match the marginal cost of private and society,and the improvement and governance of the environment often rely on the government.Fiscal expenditure is an important means for the government to control the environment.The reasonable expenditure scale and structure will have an impact on the environmental quality.Compared with the central government,local governments have unique information advantages in environmental governance.However,under the Chinese-style decentralization system,local governments tend to prefer economic growth to environmental protection,leading to environmental degradation.Therefore,it is very necessary to analyze China‘s pollution reduction problem from the perspective of local fiscal expenditure.Around the core issue of the effect of local fiscal expenditure on China‘s pollution reduction,this paper first expounds the emission characteristics of industrial pollution in China,and with the help of hierarchical cluster analysis,the prefecture-level cities are clustered according to the main socio-economic indicators,and then the characteristics pollution emission within and between the cluster city groups are discussed,so as to further highlight the role of local fiscal expenditure in the future environmental governance effects.Second,an evolutionary game model is constructed to analyze the dynamic influence mechanism of different types of local fiscal expenditure on the production transformation of industrial polluting enterprises and active emission reduction,and relevant parameters of fiscal expenditure are added to explore the characteristics and optimal strategies of government expenditure behavior in environmental governance.Finally,in view of the pollution discharge time continuous,regional differences and spatial spillover sexual characteristics,using a sample of 286 prefecture-level cities,this paper uses dynamic GMM model,panel quantile model and spatial panel model to discuss the environmental governance effect of the scale and structure of local fiscal expenditure,and further clarifies the importance of the human capital and green innovation in terms of environmental quality improvement.Based on the comprehensive application of hierarchical clustering analysis,entropy weight method,evolutionary game model and econometric regression,the main conclusions of this paper are as follows:First,at the present stage,China‘s total industrial pollution emissions show a downward trend,but time sustainability,regional differences,and spatial spillover of the emissions still exist.On the whole,all kinds of pollution emissions have a certain time duration and strong path dependence,which is still the focus of local governments‘ governance.For each cluster city group,the emission difference of the economically developed city groups was significantly higher than that of other city groups in both the mean emission and the emission difference of the cities within the cluster.In addition,compared with the base period,the pollution emissions of each city group decreased in the reporting period,but the emission difference within the city groups tended to expand,which was particularly obvious in the economically developed city groups.Second,local governments and polluting enterprises take different strategies based on their own interests to deal with each other‘s environmental pollution problems,which is a dynamic game process.Whether the two sides finally realize?cooperation? or ?collusion? depends on their game order and initial endowment.Under the stable condition of final ?cooperation?,when the local government uses more funds to subsidize the cost of cleaner production,the polluting enterprises will accelerate to the strategy of ?cleaner production?.It means that the environmental expenditure strategy of the local government will have a certain positive effect on the final realization of ?cooperation? steady state.Third,the scale and structure of local fiscal expenditure will have a certain effect on industrial pollution.Specifically,1)Increasing the expenditure scale can aggravate the environmental pollution in the region to some extent,but the expenditure scale can effectively reduce the pollution emission through human capital accumulation.Meanwhile,both the time persistence characteristics of pollution and the environmental Kuznets hypothesis have been verified.2)Environmental expenditure in the expenditure structure can effectively reduce pollution emissions,while education and S&T expenditure can indirectly promote enterprise emission reduction through green innovation mechanism,but the effect is relatively weak.3)In terms of regional differences in pollution,there are certain differences in the impact of expenditure scale and structure on industrial pollution.Such differences are not only reflected in the categories of pollutants,but also within and between cluster city groups.4)In terms of spatial spillover of pollution,the indirect effect of expenditure scale and structure on pollutants with stronger spillover is significantly greater than the direct effect.This result is particularly evident in SDM model with neighborhood effect.Compared with the existing literature,the innovation of this paper is mainly manifested in the following three aspects:First of all,the research perspective has some innovation.Based on the China‘s prefecture-level city,this paper elaborates the influence mechanism and effect of local fiscal expenditure on pollution emission.On the one hand,it focuses on the dynamic influence mechanism of different types of local government fiscal expenditure on the production transformation of polluting enterprises and active emission reduction,and tries to explore the strategic choice behavior of local fiscal expenditure on relevant stakeholders from the perspective of group behavior.On the other hand,based on a sample of 286 prefecture-level cities,the paper discusses the effects of local fiscal expenditure scale and structure on environmental governance within and between cluster city groups,and comprehensively considers the characteristics of pollution emissions and the role of human capital and green innovation in environmental governance.Secondly,theoretical model has some innovation.Based on the idea of evolutionary game,this paper introduces the relevant parameters of fiscal expenditure,constructs an evolutionary game model for pollution control between local government and industrial polluting enterprises,and calculates the critical conditions of local government‘s preference for environmental expenditure strategy and clean production of polluting enterprises.To verify that the local government expenditure game of dynamic effect,the paper judged the convergence direction and convergence speed of the model‘s final steady state by changing the game order,initial endowment and expenditure parameters,so as to explore the characteristics and optimal strategies of local government expenditure behavior in environmental governance,which provided a strong support for local government to urge industrial polluting enterprises to implement production transformation.Finally,a variety of empirical methods are combined to expand the existing research findings: 1)blindly increasing the expenditure scale is likely to lead to the increase of pollution in the region,and the environmental quality can be improved through the accumulation of human capital.2)Environmental protection expenditure is still the ?main force? for local governments to control pollution,while education and S&T expenditure will restrain pollution emission to a certain extent,but there are great differences for different pollutants.3)The trans-regional governance effect of environmental protection expenditure is more effective for the pollutants with strong mobility and spillover,while education expenditure and S&T expenditure are more powerful in the governance of trans-regional pollution,which means that environmental governance is not only the responsibility of cities with serious pollution,but also the common task of neighboring cities,especially for the pollutants with spillover.It means that environmental governance is not only the responsibility of cities with serious pollution,but also the common task of neighboring cities.Especially for pollutants with spillover,it needs the joint prevention and control mechanism of ?central overall planning and local collaborative governance? implemented by the state.