Low-carbon city pilot policy and corporate environmental violations: Evidence from heavily polluting firms in China

Juling Wang, Lihua Liu and Yangchao Ou

Finance Research Letters, 2024, vol. 65, issue C

Abstract: This study examines the impact of China's Low-Carbon City Pilot Policy (LCCPP) on heavily polluting firms’ environmental violations. Using a staggered difference-in-differences (DID) model, we find that LCCPP significantly reduces heavily polluting firms’ environmental violations. Mechanism tests indicate that this reduction is driven by strengthening government green attention, increasing environmental subsidy, and environmental investment. Heterogeneity studies reveal that the policy's effects are more pronounced in state-owned enterprises, firms in less competitive industries, and firms with lower levels of management shareholding. Our research provides theoretical and empirical support for the ongoing expansion of LCCPP, highlighting its positive effects on environmental governance.

Keywords: Low-carbon city pilot policy; Corporate environmental violations; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: G30 G38 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612324005786
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324005786

DOI: 10.1016/j.frl.2024.105548

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().