Speaker: Prof. Weng Xixi, Guanghua School of Management, Peking University

Time: April 11, 2023 (Tuesday) 14:00 pm

Venue: Main Building 317

Brief introduction of the report:

This paper examines how local Chinese officials respond to hybrid contracts (i.e., minimum air pollution control targets together with high-powered promotion incentives for economic growth), and make trade-offs between economic development and environmental protection. Using a novel prefecture-day level dataset on air quality and applying a regression discontinuity design, we find strong evidence that air quality tends to improve when the air quality target is doomed to fail, but deteriorates significantly after the early fulfillment of the target is guaranteed. These responses are mainly driven by ``outsiders'' – local officials who had no previous working experience in the locality and probably valued the local environment less. We also find evidence that for those cities facing a higher pressure of local economic development, the improvement in air quality performance after doomed failure will be weakened while the deterioration in air quality performance after early fulfillment will be more severe. We build a simple theoretical model to rationalize these key findings. Our study sheds light on how minimum air quality targets have functioned in China’s context and highlights the role of minimum performance targets in balancing efforts at environmental protection and economic development.

Reported by:

Weng Xi is currently a professor employed by the Department of Applied Economics of Guanghua School of Management of Guanghua School of Management, a young Changjiang scholar of the Ministry of Education, a winner of the National Natural Science Foundation for Distinguished Young Scholars, a vice chairman of the Chinese Society for Information Economics, and a member of the Academic Committee of the Department of Economics and Management of Peking University. His main research fields are Game theory, information economics and organizational economics. He graduated from Peking University with a bachelor's degree and a master's degree, and graduated from the University of Pennsylvania with a doctor's degree. His research results have been published in top academic journals abroad, such as Journal of Finance, Management Science, Economic Journal, American Economic Journal: Microeconomics, Journal of Economic History, Journal of Economic Theory, International Economic Review, and Rand Journal of Economics. He has presided over or participated in more than ten projects, including the National Natural Science Foundation of China, the Beijing Social Science Foundation, the National Development and Reform Commission, the State Administration for Market Regulation, and the China Association for Science and Technology. Dr. Weng has won the following awards in scientific research: 2022 Zhang Peigang Development economics Young Scholar Award, 2020 Eighth University Science Research Excellence Award (Humanities and Social Sciences) Youth Achievement Award, 2019 China Information Economics Excellence Achievement Award, 2019 Li Yining Scientific Research Award, 2017 China Information Economics Youth Innovation Award, 2017 the 13th Peking University Humanities and Social Sciences Research Excellence Award, 2016 China Information Economics Wujiapei Award.

(Undertaken by: Department of Management Engineering, Research and Academic Exchange Center)