Share pledging and corporate environmental investment

Yukun Li and Danfeng Zhu

Finance Research Letters, 2022, vol. 50, issue C

Abstract: This paper examines the effect of share-pledging of controlling shareholder on corporate environmental investment. Using a sample of Chinese listed companies over the period 2010 – 2019, we find evidence that there is a negative relationship between share-pledging and corporate environmental investment. The above conclusion is still credible after a series of robustness tests. Further, we identify that the relationship is more pronounced in firms with more serious tunneling by controlling shareholder and the risk of share price collapse. Overall, the paper enriches the literature on corporate environmental governance effects of ownership structure and the research on economic consequences of share-pledging, which may be of interest to regulators in developing countries who are concerned with the long-term performance of corporate environmental governance.

Keywords: Share pledging; Corporate environmental investment; Controlling shareholders (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:50:y:2022:i:c:s1544612322005244

DOI: 10.1016/j.frl.2022.103348

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