Purpose: This study aims to investigate the external effect of the economic growth target pressure of local governments on establishment-level SO₂ emissions.Design/methodology/approach: Based on manually collected panel data of 74,058 China's industrial establishments and more than 330 thousand observations from CIED and ESR, the authors use a firm-fixed effect model, instrumental variables estimation and heterogeneity tests to identify the environmental externality of economic growth target pressure.Findings: The establishments in cities that meet or slightly exceed the economic growth target experience greater negative externality measured by SO₂ emission intensity. This external effect is more pronounced in regions: with a strict and overweighted target setting; with stronger officials' promotion incentives; with a low degree of marketization; and in firms with great economic importance. The authors identify the underlying mechanisms of dependence on dirty industry and the relaxation of environmental enforcement. And the environmental protection constraints in 2007 mitigate the negative externality.Practical implications: The paper sheds light on to what extent economic growth target pressure has a negative externality of pollution in China and how this pressure may conflict with environmental protection.Originality/value: This paper complements prior research on the economic effects of economic growth targets, expands the knowledge on the determinants of establishment-level pollution emission from the perspective of target pressure and provides insight into the environmental externality that results from political factors.

Whether maintaining a close relationship with China can benefit economic performance in the postpandemic era is a crucial concern for countries around the world. This study employs the difference‐in‐difference (DID) model and propensity score matching to estimate the impact of connecting people proposed by the Belt and Road Initiate (BRI) on the subnational economic development of the Association of Southeast Asian Nations (ASEAN) cities. The quasi‐natural experiment of DID is based on the establishment of China–ASEAN friendship cities. We capture the ASEAN subnational economic development by calibrated satellite nighttime light data. Our findings show that the establishment of a friendship‐city relationship has a positive impact on the subnational economic development of China–ASEAN cities. Further analysis indicates that bilateral trade, China's direct investment in contracted projects, and mutual visits by national leaders may be the underlying channels for boosting the economic development of China–ASEAN friendship cities. This study contributes to the literature on friendship city and provides ex‐ante implications on the BRI from the perspective of connecting people with first‐hand empirical evidence.

This paper investigates how local governments coordinate the relationship between economic growth targets (EGT) and environmental protection targets (EPT) and the impact of such coordination on firm’s environmental performance. Using the pollution emission data of China’s industrial firms covering 2003 to 2013, we show that firms in the cities where officials are setting overweighted economic growth targets have more sulfur dioxide intensity, while the central government’s hard constraints on EPT included in the official performance evaluation system could partially mitigate the environmental externality of the economic growth target. Further, we find that overweighted EGT significantly decreases firms’ desulfurization facilities, capacity, and ratio, while the hard constraint of EPT helps mitigate this negative relationship. We also find that the positive relationship between overweight EGT and firm emissions is more pronounced in the dirty industry, while the hard constraint of EPT helps to mitigate this relationship. The above results help to identify an underlying mechanism of environmental regulation. Finally, we show that converting the hard constraints of environmental protection targets to self-constraint by local government officials could reverse the environmental externality of the economic growth target.

We take the economic stimulus package in China as a quasi-natural experiment to investigate the effect of urban credit expansion on the quality of green innovation at the city level. The analysis takes urban-level and firm-level data from 2004 to 2015 and adopts the PSM-DID approach. Our empirical results suggest that the implementation of credit expansion makes a significant contribution to the improvement of green patent quality. In addition, the mechanism suggests that urban credit expansion policies promote corporate green innovation through channels such as providing credit expansion and a lower cost of financing enterprise transformation and upgrading. This research also suggest that credit expansion promotes economic growth while also incentivising first-tier cities to engage in more green transformations and upgrade to improve the quality of green patents. Our findings also provide an important insight for the implementation of credit expansion policies and the achievement of sustainable development in countries around the world, particularly in developing countries. Finally, this paper argues that China’s credit expansion policy in 2009 has played a role in improving the quality of green innovation and improving green transformation.

This paper uses the exogenous shock- Thailand military coup on May 22, 2014-as a natural experiment to test the impact of military political connections on the value of Thai’s listed firms. Results show that the military coup will bring significant benefits to the share price of listed firms with military political connections. Moreover, the DID estimations show that the military rule can significantly increase the Tobin’s Q of military political affiliates after the military coup. The main influential mechanism is that, after the military is in power, the listed firms will hire personnel with military background to enter the management. This move will bring long-term financing convenience to the military politically connected firms and enable them to use more funds to capital investment and R & D activities.