Do state subsidies increase corporate environmental spending?

Yang Wang; Yifei Zhang

doi:10.1016/j.irfa.2020.101592

Do state subsidies increase corporate environmental spending?

Yang Wang
, Yifei Zhang

Research output: Contribution to journal › Article › peer-review

85 Citations (Scopus)

444 Downloads (Pure)

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 language	English
Article number	101592
Number of pages	11
Journal	International Review of Financial Analysis
Volume	72
Early online date	23 Sept 2020
DOIs	https://doi.org/10.1016/j.irfa.2020.101592
Publication status	Published - Nov 2020

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Keywords

Environmental spending
Financial constraints
State subsidies
State-owned enterprises

ASJC Scopus subject areas

Finance
Economics and Econometrics

Access to Document

10.1016/j.irfa.2020.101592Licence: Elsevier User Licence

Author Accepted ManuscriptAccepted author manuscript, 1.22 MBLicence: CC BY-NC-ND

Cite this

@article{00d88b92c2ba4fe58e3fa00e4f3e1d0f,

title = "Do state subsidies increase corporate environmental spending?",

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. ",

keywords = "Environmental spending, Financial constraints, State subsidies, State-owned enterprises",

author = "Yang Wang and Yifei Zhang",

year = "2020",

month = nov,

doi = "10.1016/j.irfa.2020.101592",

language = "English",

volume = "72",

journal = "International Review of Financial Analysis",