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    Bank of Finland, Rauhankatu 19 B, Helsinki

Yanrui Wu (University of Western Australia): Political connections and industrial pollution: Evidence from China

Co-authors: Yuping Deng (School of Economic and Trade, Hunan University; Business School, University of Western Australia, Perth) and Helian Xu (School of Economic and Trade, Hunan University)


This paper aims to examine the link between political connections and pollution discharges. The empirical results show that political connections are the institutional origin which causes enterprises to adopt strategic pollution discharges. Local officials with low education, young age, short tenure and lateral moves are more likely to build political connections with polluters. This phenomenon results in inadequate enforcement of regulation and emission control. In addition, the pollution discharges of politically connected enterprises show distinctively periodical patterns. It is found that the politically connected enterprises tend to actively enforce emission control in the preceding year and the year when the National Congress of Communist Party of China is held, and increase emissions after the Congress.


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