Environmental compliance and human capital: Evidence from Chinese industrial firms |
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| Institution: | 1. Department of Economics, University of Göttingen, Platz der Göttinger Sieben 3, 37073 Göttingen, Germany;2. Department of Economics, NGU Nürtingen-Geislingen University, Neckarsteige 6-10, 72622 Nürtingen, Germany;1. Università Cattolica di Milan, Italy;2. Università di Milano and IEFE-Bocconi, Italy;3. Fondazione Eni Enrico Mattei and CMCC, Italy;1. Economics Department, Clark University, 950 Main Street, Worcester, MA 01610, United States;2. EPA, National Center for Environmental Economics, United States;3. Birmingham Southern College, United States;4. University of Massachusetts, Dartmouth, United States;1. Vrije Universiteit Amsterdam, Department of Spatial Economics, The Netherlands;2. International Livestock Research Institute, Addis Ababa, Ethiopia;3. Netherlands Environmental Assessment Agency (PBL), The Netherlands;4. University of Waterloo, Department of Economics and The Water Institute, Canada |
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| Abstract: | By using a unique cross-sectional dataset of Chinese industrial firms, this paper investigates the external and internal effects of human capital on firms’ environmental performance. The result shows that firms have better environmental compliance because they are ‘pushed’ into compliance by the internal driver of human capital and ‘pulled’ to be environmental friendly by the external force of social human capital stock. This finding is robust when we take into account the possible endogeneity of human capital. In addition, evidence from this study suggests that the current situation of weak implementation of environmental supervision and evasion of environmental monitoring could be improved by promotion of internal and external human capital. |
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| Keywords: | Environmental compliance Human capital External and internal effects Endogeneity |
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