期刊
ENVIRONMENTAL SCIENCE AND POLLUTION RESEARCH
卷 28, 期 41, 页码 58007-58017出版社
SPRINGER HEIDELBERG
DOI: 10.1007/s11356-021-14736-2
关键词
Environmental investments; Pollution abatement; Financial constraints; Accounting performance; Market performance; China
This study examines the relationship between corporate environmental protection investments and financial constraints on the accounting and market performance of Chinese listed firms. The results show that environmental investments have a positive impact on the performance of non-constrained firms, but a negative association with financially constrained firms.
China has emerged as the world's largest pollutant emitter due to rapid industrialization and a remarkable economic upsurge in recent decades. Rising carbon emissions have exerted more social and regulatory pressure on Chinese corporations to undertake environmental protection investments. However, the implications of such investments on the financial fundamentals of a firm remain unclear. Especially, little is known about how environmental protection investments affect the performance of financially constrained firms. This study explores the mediating role of financial constraints in the nexus between corporate environmental protection investment and the accounting and market performance of Chinese listed firms during 2009-2016. The empirical outcomes of the generalized method of moments (GMM)-based regressions reveal that environmental investments of non-constrained firms have a positive impact on the accounting and market performance of such firms as measured by ROA and Tobin's q, respectively. Interestingly, environmental protection investments have a significant negative association with both (i.e., the accounting and market) performance proxies of firms that are facing financial constraints. These findings imply that in pursuit of environment preservation and pollution abatement, regulators shall provide more financial flexibility and enabling environment to financially constrained firms to optimize their role in pollution abatement. Besides, financially non-constrained firms shall be assigned greater environmental responsibility to undertake a proportionately higher environmental investment than financially constrained firms.
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