Circular Economy Policy and Enterprises’ Environmental Performance: Booster or Stumbling Block?

Circular economy policy can improve the environmental performance of enterprises by reducing resource consumption and waste and realizing resource recycling, but it may also frustrate the enthusiasm of enterprises to control pollution by increasing the pressure of regulation cost or being trapped by technical complexity. Therefore, this paper uses China’s industrial enterprise database, industrial enterprise pollution emission data and input-output data to identify the impact of circular economy pilot policies on corporate pollution emission by constructing a difference-in-differences model, so as to analyze whether it is a “booster” or a “stumbling block” in corporate pollution control. It is found that after the implementation of the circular economy pilot policy, the pollutant emissions of the experimental group are significantly lower than those of the control group, indicating that the circular economy pilot policy has significantly improved the environmental performance of enterprises. This conclusion is still valid after a series of robustness tests such as replacing the explained variable, deleting the contemporaneous policy interference, controlling the time trend of the industry, and randomly selecting the placebo in the experimental group. Furthermore, circular economy policies can promote enterprises’ environmental performance by promoting energy saving and consumption reduction, strengthening end treatment and enhancing technology development capabilities. The heterogeneity test finds that the effect of circular economy policy is more prominent in the samples of enterprises in non-resource-based cities, enterprises in super-large cities and enterprises with higher openness level to foreign investment in the upstream service industry. Under the “dual carbon” goal, the conclusions of this paper expand the theoretical research on the effect evaluation of environmental regulation policies from the new perspective of circular economy, and provide targeted policy basis for helping to achieve green, circular and low-carbon development, promoting the construction of ecological civilization, and planning a “beautiful China” blueprint.