Microeconomic effects of designating National Forest Cities: Evidence from China's publicly traded manufacturing companies

Wenjian He, Yu Cheng, Ying Lin and Hongxiao Zhang

Forest Policy and Economics, 2022, vol. 136, issue C

Abstract: This study assesses the impact of designating National Forest Cities (NFCs), as an integrated environmental policy, on corporate business performance. To that end, we use propensity score matching and difference-in-differences models, coupled with data from China's manufacturing companies listed on Shanghai and Shenzhen Stock Exchanges over the period of 2000–2018. Our results show that the designation can significantly improve the business performance of manufacturing enterprises, but the effect takes a long time to shore up business performance—six years after the initial designation. This finding is robust across a series of tests. Furthermore, we show that the impact of NFC designation on corporate performance is reflected in improved labor productivity, capital allocation, innovation capacity, and management efficiency of the enterprises. These results not only validate the Porter Hypothesis conditionally but also provide a clear justification for policymakers and business managers of different countries to promote air quality and environmental improvement, including urban greening and forest/tree cover development.

Keywords: Environmental regulation; National Forest City; Difference-in-difference; Quasi-natural experiments; Corporate business performance (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1389934121002756
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:forpol:v:136:y:2022:i:c:s1389934121002756

DOI: 10.1016/j.forpol.2021.102669

Access Statistics for this article

Forest Policy and Economics is currently edited by M. Krott

More articles in Forest Policy and Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().