Market competition, environmental governance subsidies, and environmental penalty risks

Yang Jiao, Hairong Tang, Da Tu and Hongli Liu

Finance Research Letters, 2025, vol. 79, issue C

Abstract: This study analyzes data from listed companies (2010–2022) to examine how market competition, environmental governance subsidies, and environmental penalty risk are interrelated. The empirical results show that market competition increases penalty risk, while subsidies mitigates them. Environmental governance subsidies moderate the relationship between market competition and corporate environmental penalty risk, showing heterogeneity in their effect on heavily polluting and nonheavily polluting enterprises. Furthermore, the impact of competition has a size threshold effect.

Keywords: Market competition; Environmental governance subsidies; Risk of environmental penalties (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325004878

DOI: 10.1016/j.frl.2025.107224

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