Facilitate or Inhibit : Corporate Environmental Performance and Financing Costs
The proposal of the carbon peak and carbon neutralization goal has led China into an era of emissions reduction and a climate economy. It is a question of practical and theoretical significance to explore whether the environmental protection behavior of firms can achieve a win–win situation. Using a panel dataset of firms in China's heavily polluting industries from 2010 to 2019, this study examines the economic impacts of corporate environmental performance (CEP). The results show that improvements in CEP can help reduce financing costs, thereby providing incentives for firms to respond to double-carbon goals. Then we explore the moderating effects of this relationship from the two dimensions of political connection and government ecological attention (GEA). We find that political connections strengthen the inhibitory effect of CEP on financing costs. However, GEA has weakened this inhibitory effect. Moreover, we employ a panel quantile regression approach to explore whether the impact of CEP on financing costs is asymmetric. The results show that CEP has a significant inhibitory effect on financial costs and that this effect is asymmetrical at different levels of financing costs. Our study provides new empirical evidence about environmental performance and financing capabilities that help link corporate environmental strategies to finance strategies
Year of publication: |
2022
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Authors: | Wang, Zongrun ; Yang, Lili ; Ren, Xiaohang ; Taghizadeh-Hesary, Farhad |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
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