State-enterprise relation, local economic priority, and corporate environmental responsibility

Xianyan Wang and Lihong Wang

Applied Economics, 2019, vol. 51, issue 10, 995-1009

Abstract: This paper empirically investigates how the state-enterprise relation and local government’s economic priority affect corporate environmental responsibility in a sample of Chinese polluting enterprises during 2009–2013. We find that firms appointing politically connected directors fail to fulfil their obligations in environmental responsibility, characterized by a poor enforcement of discharge fees. Besides, firms contributing a large share of industrial output to the local economy are with a smaller magnitude of discharge levies. In addition, the enforcement of discharge fees is poorer in the most polluted regions, while tourism activity and the local government’s incentive to disclose environmental information increase discharge fees.

Date: 2019
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DOI: 10.1080/00036846.2018.1524568

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