Corporate environmental governance scheme and investment efficiency over the course of COVID-19

Taking the COVID-19 outbreak as the exogenous shock, we use quarterly reports of Chinese listed firms to examine whether enhanced environmental governance scheme improves corporate investment efficiency over the course of COVID-19. The results show that after the outbreak, firms with greater environmental governance scheme experience more efficient investments, with this effect being more pronounced in non-state-owned enterprises, firms unlisted as key pollutionmonitoring units, and firms with higher financial constraints. The results are robust to a battery of robustness checks. These findings provide new evidence on the importance of environmental governance in reaping economic benefits and resilience during crisis times.

Automated summary

The study finds that firms with enhanced environmental governance scheme experienced more efficient investments during the COVID-19 outbreak, especially in non-state-owned enterprises, firms unlisted as key pollution monitoring units, and firms with higher financial constraints.