Does Central Environmental Protection Inspector Improve Corporate Social Responsibility? Evidence from Chinese Listed Companies

Mei Feng, Chu Chen (), Jia Liu and Wei Jia
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Mei Feng: School of Economics and Management, University of Science and Technology Beijing, No. 30, Xueyuan Road, Haidian District, Beijing 100083, China
Chu Chen: School of Economics and Management, University of Science and Technology Beijing, No. 30, Xueyuan Road, Haidian District, Beijing 100083, China
Jia Liu: School of Economics and Management, University of Science and Technology Beijing, No. 30, Xueyuan Road, Haidian District, Beijing 100083, China
Wei Jia: School of Economics and Management, University of Science and Technology Beijing, No. 30, Xueyuan Road, Haidian District, Beijing 100083, China

Sustainability, 2022, vol. 14, issue 22, 1-22

Abstract: As an essential innovation in China’s environmental governance, the central environmental protection inspector policy (CEPI) plays a crucial role in driving the development of the corporate responsibility system. Using the difference-in-differences model with multiple time periods, samples of A-share listed companies in Shanghai and Shenzhen from 2013 to 2020 are chosen to examine the impact of the CEPI on corporate social responsibility within the context of China’s modern governance system. The results indicate the following: first, the CEPI can significantly promote enterprises to fulfil social responsibility; second, the local government environmental regulation and public participation are the dual guarantees for the effect of the CEPI’s policy, and market-based environmental regulation of the local government is more effective than command-and-control environmental regulation; and third, a high propensity for technological innovation is a critical incentive for businesses to fulfil their social responsibilities under the CEPI. For enterprises to actively respond to society, the compensation effect of innovation must be greater than its cost effect. By examining the interaction between the Central Government, the local government, companies and the public, this research aims to provide theoretical support for accelerating the creation of China’s contemporary environmental governance system.

Keywords: central environmental protection inspector; corporate social responsibility; environmental regulation; technological innovation; difference-in-differences (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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