Government support for environmental regulation: Evidence from China

Tong Fu, Siying Yang and Ze Jian

International Review of Financial Analysis, 2022, vol. 83, issue C

Abstract: With an emphasis on innovation, Porter (1991) challenges the traditional wisdom and then hypothesizes a promotional effect of environmental regulation on firm performance. This paper reveals a complementary source, i.e., government support, to explain the promotional effect in a developing country. We use evidence from China to find a positive causal effect of environmental regulation stringency on firm performance. To justify our theory, we show that state ownership shares of a firm as an exogenous proxy for government support positively moderate the causal effect. We also use causal mediation analysis to document that loans from banks as the representative type of government support mediates the causal effect significantly in statistics and economics.

Keywords: Environmental regulation; Firm performance; Government support; China (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521922001028
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:finana:v:83:y:2022:i:c:s1057521922001028

DOI: 10.1016/j.irfa.2022.102135

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().