Regulating Conglomerates: Evidence from an Energy Conservation Program in China
Date
2025-02-01
Authors
Journal Title
Journal ISSN
Volume Title
Repository Usage Stats
views
downloads
Citation Stats
Attention Stats
Abstract
We study a prominent energy regulation affecting large Chinese manufacturers that are part of broader conglomerates. Using detailed firm-level data and difference-in-differences research designs, we show that regulated firms cut output and shifted some production to unregulated firms within their conglomerate instead of improving their energy efficiency. To account for conglomerate and market spillovers, we interpret these results through the lens of an industry equilibrium model featuring conglomerate production. The policy raises welfare if the per ton benefits of carbon reduction exceed $161. Alternative policies that exploit public information on business networks can increase aggregate energy savings by 10 percent.
Type
Department
Description
Provenance
Subjects
Citation
Permalink
Published Version (Please cite this version)
Publication Info
Chen, Q, Z Chen, Z Liu, JCS Serrato and DY Xu (2025). Regulating Conglomerates: Evidence from an Energy Conservation Program in China. American Economic Review, 115(2). pp. 408–447. 10.1257/aer.20211455 Retrieved from https://hdl.handle.net/10161/34325.
This is constructed from limited available data and may be imprecise. To cite this article, please review & use the official citation provided by the journal.
Collections
Scholars@Duke
Daniel Yi Xu
Daniel Yi Xu is the David Rubenstein Distinguished Professor of Economics at Duke University, a Faculty Research Associate at the National Bureau of Economic Research, a Research Fellow at the Center for Economic Policy Research, and a Senior Fellow at the Asian Bureau of Finance and Economic Research.
His research focuses on the intersection of productivity, international trade, and industrial organization. Professor Xu’s current research agenda involves the use of large-scale microdata to model and estimate a broad range of dynamic individual firm decisions and to examine how these decisions impact resource allocation, industry performance, and economic growth, particularly in developing and emerging economies.
His most recent work has been published in leading economics journals, including the American Economic Review, Journal of Political Economy, Review of Economic Studies, RAND Journal of Economics, Review of Economic Dynamics, and Management Science. Professor Xu is currently a co-editor of the American Economic Journal: Microeconomics and an associate editor of the RAND Journal of Economics. He previously served as co-editor for the Review of Economics and Statistics and the Journal of Development Economics. Additionally, he has been an associate editor for the American Economic Journal: Applied, Economic Journal, Journal of Industrial Economics, Journal of International Economics, Quantitative Economics, and the Review of Economics and Statistics.
Unless otherwise indicated, scholarly articles published by Duke faculty members are made available here with a CC-BY-NC (Creative Commons Attribution Non-Commercial) license, as enabled by the Duke Open Access Policy. If you wish to use the materials in ways not already permitted under CC-BY-NC, please consult the copyright owner. Other materials are made available here through the author’s grant of a non-exclusive license to make their work openly accessible.