The effects of heterogeneous environmental regulation on the effectiveness of corporate green investment in China

Abstract

The issue of effectiveness is concerning when the entereprise comes to making green investment decisions facing environmental regulations. Existing literature ignores the research on the impact mechanism of different environmental regulations on the effectiveness of corporate green investment (ECGI). Based on the data of listed companies in China's heavily polluting industries from 2017 to 2021, this paper used the data envelopment analysis (DEA) model to measure the ECGI. Then, the influence mechanism of two types of environmental regulation on the ECGI was analyzed. The results show that the ECGI for listed companies in heavily polluting industries is generally low, and the gap between companies is large. Different types of environmental regulations exert heterogeneous effects on the ECGI. Environmental taxes and environmental subsidies have an inverted U-shaped and negative impact on the ECGI respectively, and this impact is particularly significant in non-state-owned enterprises and small-scale enterprises. The mechanism test shows that the environmental tax has a “forcing” effect on the ECGI, which is manifested in the fact that enterprises improve the ECGI through source governance. Environmental subsidies have a “crowding out” effect on the ECGI, which is manifested in the fact that enterprises inhibit the ECGI by increasing the redundancy of green investment.

Russian Companies’ Motivations for Making Green Investments

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Research on the Impact of Heterogeneous Environmental Regulation on Enterprise Green Technology Innovation—Research on the Mediating Effect of Organizational Green Learning

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