Do state subsidies increase corporate environmental spending?

Yang Wang, Yifei Zhang

Research output: Contribution to journalArticle

Abstract

This study investigates the impact of state subsidies on corporate environmental spending of Chinese listed firms between 2011 and 2018, using a hand-collected data from corporate annual and environmental responsibility reports. We find a positive relationship between state subsidies and corporate environment spending, indicating firms receiving government subsidies are more likely to behave more environmentally responsible. In addition, the positive relationships are more pronounced among the non-state-owned enterprises (non-SOEs) and the firms experiencing financial constraints. It is because, non-SOEs are more likely to lose government support comparing to their SOE peers, thus making more efforts to address corporate pollution. Moreover, firms subject to financial difficulties tend to build an environmental responsible image and to contribute more in environment protection.

Original languageEnglish
Pages (from-to)101592
JournalInternational Review of Financial Analysis
Early online date23 Sep 2020
DOIs
Publication statusE-pub ahead of print - 23 Sep 2020

Keywords

  • State subsidies
  • Environmental spending
  • State-owned enterprises
  • Financial constraints

Fingerprint Dive into the research topics of 'Do state subsidies increase corporate environmental spending?'. Together they form a unique fingerprint.

  • Cite this