Air pollution and corporate risk-taking: Evidence from China

Jie Wang, Wanwan Wang and Fang Yuan

International Review of Economics & Finance, 2023, vol. 86, issue C, 570-586

Abstract: Using a sample of Chinese listed companies from 2014 to 2018, we investigate the effect of air pollution on corporate risk-taking. The findings show that air pollution is negatively related to corporate risk-taking in China. The mechanism analyses find that executive incentives and state ownership weaken the negative effect of air pollution on corporate risk-taking, suggesting that inducing negative mood to executives and increasing environmental regulations by local governments are two potential channels. Overall, our study provides evidence on how air pollution affects corporate policy in terms of risk-taking.

Keywords: Air pollution; Corporate risk-taking; Environmental psychology; Environmental regulation (search for similar items in EconPapers)
JEL-codes: G12 G14 I10 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:86:y:2023:i:c:p:570-586

DOI: 10.1016/j.iref.2023.04.001

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