Do state subsidies increase corporate environmental spending?

Yang Wang, Yifei Zhang

Research output: Contribution to journalArticlepeer-review

38 Citations (Scopus)
191 Downloads (Pure)


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
Article number101592
Pages (from-to)101592
JournalInternational Review of Financial Analysis
Early online date23 Sept 2020
Publication statusPublished - Nov 2020


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

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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