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The purpose of this paper is to analyze the mechanism of the role of government subsidies on corporate environmental investment and explore how specific characteristics of firms affect corporate environmental responsibility.

This paper examines the relationship between government subsidies and corporate environmental investment and models with a sample of 78,854 industries. The authors measure the corporate environmental investment by the natural logarithm of the volume of waste gas treatment facilities.

The results show the positive effect of government subsidies on corporate environmental investment. In addition, state ownership positively regulates the relationship between government and corporations, but the relationship between them is negatively regulated by the slack resources.

When people are increasingly concerned about corporate social and environmental responsibility, clarifying the link between government subsidies and corporate environmental investments can help policymakers formulate policies and allocate limited resources.

This study uses the resource-based view as a theoretical framework to reveal the mechanism of action between government subsidies and corporate environmental responsibility, enriching the previous literature that explores the issue based on the legitimacy perspective.

This study empirically investigates the impact of directors' and officers' liability insurance on corporate environmental investment.

This paper takes A-share listed firms in the most polluting industries from 2013 to 2019 as the research sample. The authors perform multiple regression analysis to examine the research question, and other approaches such as PSM and Heckman two-stage model are applied to test the robustness of the main results.

The authors find that D&O insurance insured firms significantly decrease the level of corporate environmental investment. The results keep consistent after alleviating potential endogenous concerns. Further analysis shows that the negative association between D&O insurance and environmental investment is more pronounced in firms facing greater environmental pressure and stronger market supervision, and firms located in regions with a rich legal environment.

This research extends the literature on the antecedents of corporate environmental investment and the consequences of D&O insurance.

The study may deepen people's understanding of D&O insurance and inform them of its negative effects. This research sheds light on the potential factor resulting in a relatively low level of corporate environmental investment in China, which has an important policy implication for government to carry out some regulations to make a difference.

Against the backdrop that more importance has been attached to environmental protection globally, this paper is the first study to examine the impact of D&O insurance on corporate environmental investment in the context of the transitional and emerging market-China.

Considering the greenwashing risk of symbolic environmental management, this study aims to distinguish the motivation for environmental investment growth (EIG) from the corporate cost stickiness and anti-stickiness perspectives.

This study analyzes the impact of substantive and symbolic environmental management on cost stickiness. Subsequently, competing hypotheses are proposed. Finally, empirical tests are conducted on Chinese A-share listed companies from 2010 to 2019.

EIG significantly improves enterprises’ cost stickiness. The cost of high EIG enterprises does not decrease significantly with a decline in income compared to other enterprises, which is consistent with the motivation for substantive environmental management. Enterprises with high asset specificity and optimistic management expectations show more obvious substantive environmental management. Government and public environmental concerns cause more pronounced substantive environmental management.

An evaluation of corporate environmental responsibility should take into account both what the company has disclosed and what it has actually done.

Governments and the public should have a comprehensive understanding of corporate environmental management. They need to strengthen their ability to recognize symbolic environmental management and support substantive environmental management.

Fundamental to the evaluation of corporate environmental responsibility, this study distinguishes the motivations for corporate EIG disclosures from the cost stickiness perspective to avoid the risk of greenwashing. Hypotheses on the impact of substantive and symbolic environmental management on cost stickiness are presented. This study verifies the substantive environmental management characteristics of listed Chinese companies.

This study examines the relationship between internal control and corporate environmental responsibility.

Unlike US studies that concentrate solely on internal control over financial reporting, this study uses a comprehensive index that encompasses internal control over financial reporting, operations, and compliance. Corporate environmental responsibility is measured by environmental investments. Our research sample comprises Chinese listed firms from 2010 to 2018.

The results demonstrate a positive correlation between internal control and corporate environmental investments. Furthermore, we find that firms with high-quality internal control can improve their financial and environmental performance through environmental investments. After decomposing internal control into its five components, we show that the control environment, control activities, and information and communication components exhibit stronger effects on environmental investments than the risk assessment and monitoring components. Finally, the cross-sectional analyses reveal that the positive effect of internal control is more pronounced in private firms and in firms that are subject to weaker environmental regulation.

By focusing on the effect of a comprehensive internal mechanism on corporate environmental responsibility in China, this study contributes to the literature in developed-country settings that overwhelmingly focuses on the impact of external stakeholders and regulations.

The reform and opening-up of capital market is valued for promoting sustainable development, while its impact presented as the form of deregulation of short-selling on the green innovation of enterprises in developing countries remains unclear. The purpose of this study is to outline the significance of gradual reform of financial markets in developing countries for low-carbon transformation and provide implications for achieving carbon peaking and carbon neutrality goals.

Based on the green subdivided patent data and financial data of China’s A-share listed companies, this paper takes the implementation of securities margin trading program as a quasi-natural experiment and applies the difference-in-differences (DID) model to examine the impact of deregulation of short-selling constraints on the enterprises’ green transformation.

The findings reveal that the initiating securities margin trading program significantly enhances the green innovation performance of enterprises. These findings are valid after performing a series of robustness tests such as the parallel trend test, the placebo test and the methods to exclude other policy interference. Mechanism analyses demonstrate a two-faceted effect of the securities margin trading program on the green innovation of enterprises, in which short-selling policy increases the pressure on capital market deregulation and meanwhile induces the environmental protection investment. The heterogeneity results demonstrate that the impulsive effect imposed by securities margin trading program is more significant in experimental group samples with characteristics of lower financing constraints, belonging to heavy polluting industries and possessing better environmental supervision capability.

First, previous studies have focused on the impact of financial policies implemented by banking institutions on the green innovation of enterprises, but few literatures have explored the validity of relaxing short-selling restrictions or opening the capital market in the field of enterprise’s green transformation in developing country. From the view of securities market reform, this paper broadens the incentive and supervision effects of the relaxation of short-selling control on enterprise’s green innovation performance after the implementation of securities financing and securities lending policy in China’s capital market. Second, previous studies have explored the impact of command-and-control environmental regulations, as well as market-incentivized environmental regulations such as green finance, low-carbon pilots and environmental tax reform, on the green transition of enterprises. Recently the role of the securities market in the green development of enterprises has received more attention in academia. The pilot of margin financing and securities lending is essentially a market-incentivized regulatory tool, but there is few in-depth research on how it affects the green innovation of enterprises. This paper enriches the research on whether the market incentive financial regulation policy can contribute to the green transformation of enterprises under the Porter hypothesis. Third, some previous studies used the ordinary panel regression model to explore the impact of financial policy on enterprise’s innovation performance. However, due to the potential endogenous problems of the estimated model, it might get biased conclusions. Therefore, based on the method of quasi-natural experiment, this paper selects the margin trading pilot policy as an exogenous shock to solve the endogenous or reverse causality problem in traditional measurement model and applies the DID model to study the relationship between core indicator variables.

Drawing upon resource-based view (RBV) and attribution theoretical lenses, this chapter provides a paradigm for examining the interplay among environmental investment towards green innovation, environmental disclosure as well as firm performance using the structural equation modelling (SEM) methodology. This chapter demonstrate a growing environmental awareness among stakeholders of the relevance of environmental performance to share value. It is also suggested that the mediating power of environmental disclosure between environmental investment and firm value as well as incremental goodwill is crucial. The findings of this chapter provide critical implications for several stakeholders that if environmental performance is hypothesised to affect the firm's value, companies may take proactive measures to avert potential environmental-related violations. Besides, investors may trade based on the evidence as to how firm value and its goodwill from acquisition will be affected by news of its environmental performance.

China has emerged as the world's second-largest economy due to rapid industrial expansion and phenomenal economic growth of China in recent decades. Though, this exponential economic turnaround has been fueled by widespread energy consumption, making China among the largest pollutant emitters in the world. Chinese enterprises have come under greater scrutiny and the Government has mandated Chinese companies to undertake environmental protection investment. This study aims to explore the relationship between environmental protection investment and enterprise innovation by taking evidence from Chinese listed firms.

The data of 2,568 Chinese A-share listed firm-year observations were collected from the Shanghai and Shenzhen stock exchanges during 2008–2016. This study employed ordinary least square and panel data fixed effects techniques to ascertain the association between proposed variables.

The authors' findings conjecture the crowding-out effects of environmental investments on enterprise innovation-related expenditures. Furthermore, additional empirical testing reveals that Research and Development (R&D) undertakings of state-owned and politically connected enterprises are not affected by environmental investments. Likewise, corporate innovation activities are not negatively influenced by environmental investments in polluting industries. The study findings offer fresh insights to regulators, corporate managers and stakeholders. The authors' results are robust to alternate econometric specifications and alternate variable specifications.

This study makes the following contributions toward the extant literature. First, the study investigates if there is a crowding-out effect of spending on environmental protection in the current period and the innovation expenditure in the upcoming period. Empirical results confirm that there exists a trade-off between both types of spending, implying that the spending on environmental protection will negatively influence the spending on innovation. Second, the study deepens the analysis in considering other influences in this relationship. For instance, the authors' separately consider the aforementioned trade-off in state-owned enterprises and non-state-owned enterprises. The study also examines the mediating influence of corporate political connections and industry attributes, whether or not these influence the relationship between the actual spending on environmental protection and the upcoming spending on innovation.

This study aims to use Porter’s hypothesis (PH), which tests whether corporates’ green investment has an impact on their economic performance (EP). The study argues that corporates’ environmental strategy should allow for a “win-win” situation concerning regulatory compliance.

The quantitative methodology used PH to test empirically the economic consequences of corporates’ green investment in China.

This study indicates that there is a U-shaped relationship between green/environmental investment (EI) and EP. When EI is less, corporates’ EP follows a downward sloping curve until the scale of EI increases and exceeds the “threshold.” From this turning point, EP follows an upward-sloping curve as EI increase. This relationship is more significant in high-polluting companies and state-owned companies.

The empirical results extend the research field of EI and EP for listed companies in China and cover 1,324 observations over the period 2008–2017.

First, the authors expand the research on green/EI and EP using firm-level data. Second, the study empirically tests the economic consequences of corporates’ green investment. Third, this study finds a non-linear relationship between green investment and EP due to the heterogeneity of industry attributes and property rights. These findings provide better explanations for the different research conclusions regarding the economic consequences of green investment.

Compared to global research, China’s research on EI has mainly focused on the macro and industry levels. There is still a lack of micro-level research. The paper addresses this research gap as the authors use firm-level EI data to capture companies’ green investment efforts in environmentally sustainable development and its subsequent impact on EP.

Due to environmental externalities, micro-enterprises with profit-seeking features do not develop sufficient motivation for environmental governance. In a fiscally decentralized system, local environmental protection authorities perform environmental supervision, and the intensity of the regulations that they implement has an important influence on corporate environmental governance. Based on the promotion tournament framework, this paper aims to discuss the driving mechanism of corporate environmental governance using turnover of environmental protection department directors (EPDDs) as an indicator.

Using samples of A-share companies listed on the Shanghai and Shenzhen exchanges from 2007 to 2014, this paper examines the impact of EPDD turnover on corporate environmental governance and its underlying mechanism.

The results show that corporate environmental governance exhibits a political periodicity that changes with the turnover of the EPDD, and the periodicity remains after controlling for the influence of changes in provincial party secretary and governor. Internal mechanisms analysis indicates that, without financial independence, local environmental protection departments rely on increasing sewage charges, not environmental protection subsidies, to promote corporate environmental governance. Further, considering heterogeneity among officials, it finds that the younger a new EPDD is, the more pronounced the periodicity of corporate environmental governance. However, there is no significant difference between in-system and out-system turnover.

In general, this paper describes the mechanisms of corporate environmental governance from the perspective of political economics, and the results have implications for the potential improvement of the government’s environmental supervision functions and the development of ecological civilization in China.

The purpose of this paper is to examine the effect of top management’s environmental responsibility audit (ERA) implementation on firms’ investment for environmental protection in China.

The sample comprises firms publicly traded on A-Share in China from 2011 to 2017. The authors used the ordinary least squares regression model to test the relation between ERA implementation and corporate environmental investment.

Firms’ environmental investment increases significantly after the ERA implementation. Compared to state-owned enterprises (SOEs), non-state-owned enterprises (non-SOEs) are more likely to increase their environmental investment after ERA implementation. Moreover, such change is more likely for non-heavily polluting enterprises (non-HPEs) compared to heavily polluting enterprises (HPEs).

This paper provides an in-depth analysis of the positive influence of environmental enforcement on corporate behavior, which could serve as reference for regulators on the latest environmental accounting practice in China and other emerging economies.

This paper shows that clear assignment of environmental responsibility and subsequent assessment of environmental performance are contributing factors to effective and efficient implementation of an environmental management system.

Contributing to accounting and environmental management literature, this paper explains how mandated environmental audit incentivizes firms to deal with environmental issues. Because there is no prior research concerning the mandatory implementation of environmental audit in China, this paper is of high-innovatory value by providing a better understanding of environmental auditing and providing an economic explanation for government intervention as an effective means of mitigating environmental degradation in emerging economies.