The environmental-financial nexus: Centralized environmental monitoring, eco-consciousness, and green revenues

June Cao, Zijie Huang and Millie Liew

Journal of Economic Behavior & Organization, 2025, vol. 231, issue C

Abstract: Amid tightening environmental governance, we examine whether and how firms’ eco-consciousness leads to a harmonious balance between environmental and economic performance in the form of green revenues. We utilize China's centralization of environmental monitoring in 2015 as the basis for a difference-in-differences methodology, using highly and less eco-conscious firms as the treatment and control groups. We find that relative to less eco-conscious firms, highly eco-conscious firms derive greater green revenues post-centralization. This finding is robust to underlying firm characteristics and unobservable industry- and time-specific heterogeneity. Regional internet infrastructure development and corporate greenwashing mitigation facilitate the effect on highly eco-conscious firms’ green revenues, suggesting that effective centralized monitoring relies on an integrated information transmission network and an improvement in firms’ genuine environmental accountability. Overall, eco-consciousness facilitates a win-win scenario between environmental and economic performance under an increasingly strict environmental regulatory landscape.

Keywords: Centralization; Environmental monitoring; Environmental economic benefits; Green revenues (search for similar items in EconPapers)
JEL-codes: D22 G38 L20 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:231:y:2025:i:c:s0167268125000496

DOI: 10.1016/j.jebo.2025.106929

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