 Long‐term economic consequences of corporate environmental responsibility: Evidence from heavily polluting listed companies in ChinaFei Xu, Mian Yang, Qiangyi Li and Xiaolei Yang Business Strategy and the Environment, 2020, vol. 29, issue 6, 2251-2264 Abstract: In this study, we aim to investigate the long‐term economic consequences of corporate environmental responsibility (CER) by companies from the perspective of earnings persistence and investors' response. Based on firm‐level data of 1,010 heavily polluting listed companies in China, the empirical results are as follows. First, the CER of China's heavily polluting listed companies has significantly improved their earnings persistence, that is, earnings quality. Second, the positive long‐term economic effect of CER has been achieved through two paths: improving companies' operational efficiency and reducing their credit costs. Third, CER increases investors' response to heavily polluting companies' accounting earnings. Moreover, state‐owned listed companies achieve more significant positive long‐term economic effects from CER than others. The results suggest that heavily polluting companies should correctly identify the long‐term value of CER rather than pay excessive attention to the impact of CER on their current costs and benefits. Date: 2020 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:29:y:2020:i:6:p:2251-2264 Ordering information: This journal article can be ordered from Access Statistics for this article Business Strategy and the Environment is currently edited by Richard Welford More articles in Business Strategy and the Environment from Wiley Blackwell |
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