Foreign shareholding and corporate environmental expenditure: Evidence from China

Abstract

This paper estimates the effects of foreign investments on the environmental expenditure of listed companies in China by differentiating pre‐IPO foreign investors from post‐IPO foreign investors. Our findings indicate that while pre‐IPO foreign investments make significant and positive contributions, the influence of post‐IPO foreign investments is negligible. These results are particularly pronounced for enterprises that are privately owned, located in coastal China, operating in heavily polluting industries, and whose management lacks prior experience in environmental protection and international vision. Furthermore, research efforts are devoted to uncovering potential channels through which pre‐IPO foreign investments affect corporate environmental expenditure, including environmental regulations in home countries or regions, government attention to environmental issues, media coverage, and corporate financial constraints.

Impact of Firm-Specific and Macroeconomic Determinants on Environmental Expenditures: Empirical Evidence from Manufacturing Firms

“…Due to growing public concern for the environment, the government mandates that businesses assume greater responsibility in addressing environmental issues (Singh et al 2016;Luo et al 2024). For example, the government exerts pressure on companies to increase their environmental spending (Haller and Murphy 2012;Kim and Kim 2018).…”