Political Connections and Firm Pollution Behaviour: An Empirical Study

This paper uses Chinese data to examine the link between political connections and pollution discharge by firms. Our empirical results show that political connections are the institutional means by which firms acquire strategic pollution discharge protection. This situation may lead to inadequate enforcement of pollution control regulations. Government officials who are young, of low education, promoted locally, and in office for a relatively long time are more likely to build political connections with polluters. We find that the pollution discharge of politically connected firms also varies considerably due to firm heterogeneity. This study also shows that pollution protection effects caused by political connections are more evident in the Central and Western regions, and capital-intensive industries.