A fragmented environmental state? Analysing spatial compliance patterns for the case of transparency legislation in China

Do Chinese cities compete for investments with lax environmental law enforcement? The here presented study suggests that this is true for some municipalities but not all of them. Based on data for 126 key environmental protection cities and regional economic hubs between 2010 and 2012 we show that economic decentralization and political centralization both shape spatial patterns of compliance with environmental transparency legislation. Our results give reason to suppose that the Chinese economy moved beyond homogenous preferences for low-cost regulatory arrangements. The emerging jurisdictional interaction is in line with a Tiebout sorting process, where cities compete with diverse factor packages to attract an optimal amount of investments.