Does air pollution prompt corporations to implement green management? Evidence from China

Abstract

As the Environmental Protection Law was revised and media public opinion supervise them, enterprises need to not only undertake more environmental protection responsibilities but also alleviate the contradiction between development and environment. By applying a multiple regression model, this paper studies the impact of air pollution on the management behavior of enterprises using the panel data of China’s A-share polluting enterprises listed in the Shanghai and Shenzhen stock markets between 2014 and 2019. The results of this study are as follows: First, air pollution produces a positive impact on the behavior of corporate green management. Second, media reports have brought more attention to corporate pollution and increased the positive impact of air pollution on corporate green management efforts. By further considering the internal and external heterogeneity of enterprises, the impact of air pollution on corporate green management varies when the degree of enterprise pollution and the degree of local governance differ. Moreover, this paper highlights the fact that air pollution can play a significant role in corporate green management, while media attention, as a third party, plays a regulating role in environmental supervision. This provides suggestions for strengthening green management behavior of enterprises and building comprehensive environmental supervision system. Supplementary Information The online version contains supplementary material available at 10.1007/s11356-021-16272-5.

How air pollution affects corporate total factor productivity?

“…Government regulation plays a crucial role in this dynamic, and research results support the Porter hypothesis, which suggests that environmental regulation significantly improves the green innovation level of enterprises, especially non-state-owned enterprises [19]. Air pollution has been proven to have a positive impact on corporate green management behavior, and media attention amplifies this impact by increasing public scrutiny of corporate pollution [18].…”

“…However, some scholars believe that air pollution may also encourage enterprises to engage in green innovation [17]. By increasing the total number of green patent applications, particularly in the form of patents for green utility models, air pollution significantly promotes enterprises to engage in green innovation [18]. Government regulation plays a crucial role in this dynamic, and research results support the Porter hypothesis, which suggests that environmental regulation significantly improves the green innovation level of enterprises, especially non-state-owned enterprises [19].…”

The effect of air pollution on cash holdings and financial leverage

“…The environmental attention has more importance for firms located in regions with high air pollution. For example, Zhao et al (2022) find that air pollution motivates firms to implement green management. Regulatory authorities develop policies and regulations to protect environment.…”

Is air pollution detrimental to regional innovation? An empirical heterogeneity test based on Chinese cities

“…Besides, air pollution may also damage the health of enterprise employees; thus, they may require higher wage returns ( 89 ), which also increases the operating costs and reduces the available funds. The reduction in the available funds may eventually lead to enterprises unwilling to enter or decide to relocate, for the purpose of minimizing the impact of environmental costs ( 90 ). The weakening of the innovation capability of enterprises and the loss of enterprises finally tend to lead to the decline of the overall regional innovation capability.…”