The treatment effect of the Shanxi Comprehensive Reform Area policy on PM_2.5 concentrations: A study based on a...

Based on panel data on 248 prefecture-level cities in China from 2003 to 2018, this study first estimates the treatment effect of the Shanxi Comprehensive Reform Area policy on PM_2.5 concentrations using a PSM-DID method within the counterfactual framework. The average treatment effect shows that contrary to the naive before-after analysis, on average, the Shanxi Comprehensive Reform Area policy significantly increased the PM_2.5 concentrations of prefecture-level cities in Shanxi Province by 0.211% annually, and the place-based placebo test shows that the treatment effect obtained above is robust. Second, the dynamic treatment effects show a continuous decrease in incremental effects during 2011-2018, gradually decreasing from a significant positive increment during 2011-2015 to a zero or even a negative increment during 2016-2018, indicating that the Shanxi Comprehensive Reform Area policy gradually increased in environmental friendliness. Third, the mediating effects estimated by the causal steps procedure show that the Shanxi Comprehensive Reform Area policy influenced PM_2.5 concentrations by increasing the intensity of resource exploitation and decreasing the intensity of environmental regulations, but the capacity of scientific and technological innovations had no mediating effect on the relationship between the policy and PM_2.5 concentrations. Therefore, the government should further reduce the intensity of resource exploitation, strengthen the intensity of environmental regulations, and promote environmentally focused scientific and technological innovations to reduce PM_2.5 concentrations in Shanxi Province.