Resource Misallocation and Energy-Related Pollution

Developing countries face the conflict between economic development and environmental protection. Resource misallocation will not only affect the effectiveness of economic development, but also have environmental impacts. Based on two large-scale enterprise databases in China, this paper measured the level of enterprise resource allocation, and further used empirical research methods to investigate the environmental impact of enterprise resource misallocation and specific mechanisms. The results show that the low efficiency of resource allocation will harm the quality of China’s environment. Further investigation, resource misallocation is accompanied by an increase in total energy input, a decrease in the labor-to-energy ratio and the capital-to-energy ratio, and a loss of energy efficiency, which in turn affects the environmental performance of enterprises. China is the largest developing country in the world, and research on China’s environmental and economic issues is important. The conclusions of this paper can provide experience and suggestions for other developing countries to improve environmental quality and promote sustainable development from the perspective of resource misallocation.