Does air pollution change the business strategy for investment? The strategic influence of national governance

Bingjun Zhou, Ke Gao, Jing Ning, Anqi Zhang and Jiapeng Dai

Finance Research Letters, 2024, vol. 63, issue C

Abstract: This research aims to investigate the connection between pollution secretions and corporate investment, with a particular focus on how national governance moderates this relationship. Utilizing a ten-year dataset (2010–2019) from publicly listed enterprises in BRICS countries, the study finds that air pollution negatively affects corporate investment by increasing operational risks and regulatory uncertainties. However, national governance significantly moderates this adverse impact. The analysis suggests that policy officials should prioritize effective governance, highlighting its dual benefits in promoting environmental sustainability and fostering investment growth. Corporate managers are urged to recognize the importance of considering air pollution and national governance when making investment decisions.

Keywords: Air pollution; Environment stress theory; Corporate investment; Institutional theory; National governance (search for similar items in EconPapers)
JEL-codes: G31 G38 Q53 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324003325

DOI: 10.1016/j.frl.2024.105302

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