Do state subsidies increase corporate environmental spending?

Yang Wang and Yifei Zhang ()

International Review of Financial Analysis, 2020, vol. 72, issue C

Abstract: This study investigates the impact of state subsidies on corporate environmental spending of Chinese listed firms between 2011 and 2018, using a hand-collected data from corporate annual and environmental responsibility reports. We find a positive relationship between state subsidies and corporate environment spending, indicating firms receiving government subsidies are more likely to behave more environmentally responsible. In addition, the positive relationships are more pronounced among the non-state-owned enterprises (non-SOEs) and the firms experiencing financial constraints. It is because, non-SOEs are more likely to lose government support comparing to their SOE peers, thus making more efforts to address corporate pollution. Moreover, firms subject to financial difficulties tend to build an environmental responsible image and to contribute more in environment protection.

Keywords: State subsidies; Environmental spending; State-owned enterprises; Financial constraints (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (26)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:72:y:2020:i:c:s1057521920302362

DOI: 10.1016/j.irfa.2020.101592

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