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【Nov. 21 Workshop】Xin TANG: The Size Distribution of Firms and Aggregate Industrial Water Pollution

2016-11-18

NSE WORKSHOP



The Size Distribution of Firms and Aggregate Industrial Water Pollution


Time:13:00-14:30, Nov. 21st/Mon., 2016
Venue:618, Science Building #5, PKU
Host:Jiajun XU, Xin WANG, Yong WANG
Speaker:Xin TANG (Wuhan University)


【ABSTRACT】


We show that misallocation across firms amplifies industrial pollution by distorting the firm size distribution in China. Using a unique firm level data from China, we find that larger firms are more likely to use clean technology, and emit less pollutants per output. We also provide evidence of size-dependent distortions that reallocate factors away from large productive firms. In a heterogeneous firm model with an endogenous choice of pollution treatment technology, we show that size-dependent distortions lower the adoption rate of clean technology, amplify aggregate pollution intensity, and lower aggregate output. Our quantitative results show that eliminating size-dependent distortions would increase mean firm size by 130% and aggregate output by 30%. Meanwhile, the fraction of firms using clean technology would increase by 27% and aggregate pollution decrease by 20%. In contrast, tightening environmental regulations would result in a sizable decrease in aggregate pollution, but have a negligible effect on aggregate output.



【SPEAKER】




Xin Tang is currently an assistant professor of Department of World Economics at Economics and Management School of Wuhan University. He joined Wuhan University in 2015, after receiving his Ph.D. from Stony Brook University. His research focuses on macroeconomics and development economics. 

For more information about the speaker, click here