Abstract
As a byproduct of the rapid development of China’s economy, the tradeoff between environmental protection and economic growth has become increasingly prominent. Environmental violations, especially repeated environmental violations (REVs), are becoming an increasing concern. Nevertheless, previous studies mainly empirically analyze single and static environmental violations, and there is still a lack of attention paid to clearly defining REVs as well as clarifying their influence on enterprises. In this study, we introduce the concept of REVs and provide a mathematical measurement framework for quantifying them. Moreover, using a sample of Chinese listed companies, we further investigate the role of enterprises’ ownership type, geographical location and industry type in the relationship between REVs and enterprises’ financial losses. The results show that the average financial loss caused by REVs is significantly higher in state-owned enterprises (SOEs) than in nonstate-owned enterprises (NSOEs) and more intensive in high-pollution than in low-pollution enterprises. Moreover, enterprises operating in eastern China suffer greater losses than those in midwest China. The results also indicate that monetary penalties play a critical role in environmental regulations, while such regulations need to be further improved to address enterprise REVs. This study fills the gaps in the existing research on REVs and sheds light on the importance of environmental protection in developing countries.
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Data availability
The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.
Notes
The data are from the Inspection Report on Environmental Information Disclosure in 2019 Annual Reports of A-share Listed Companies, which is reported by the Shanghai Minhang District Qingyue Environmental Information Technology Service Center, which is a nonbusiness organization committed to promoting environmental information disclosure and helping companies “go green.”
https://www.ipe.org.cn/GreenSecurities/Securities.html. IPE is a nonprofit environmental research institute committed to collecting, collating and analyzing the environmental information disclosed by governments and enterprises.
Based on the heavy polluting industry definition of the Ministry of Environmental Protection of China, this paper regards power, steel, cement, electrolytic aluminum, coal, metallurgy, building materials, mining, chemicals, petrochemicals, pharmaceuticals, light industry, textiles and tanning as high-pollution industries.
According to the National bureau of statistics of China, the eastern region includes Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Hainan provinces (cities); the central and western regions include Shanxi, Anhui, Jiangxi, Henan, Hubei, Hunan, Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Liaoning, Jilin and Heilongjiang provinces (cities).
CSMAR is developed by the China Accounting and Finance Research Center of the Hong Kong Polytechnic University and the Shenzhen GTI Financial Information Limited.
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CH was involved in conceptualization and writing original draft preparation; HL was involved in data curation; ZW was involved in conceptualization, methodology and writing—review and editing; MT was involved in formal analysis; and YW and LG were involved in data curation.
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Hu, C., Li, H., Wang, Z. et al. From contingency to repeat: the concept and measurement of repeated environmental violations in enterprises. Environ Dev Sustain 26, 9455–9480 (2024). https://doi.org/10.1007/s10668-023-03103-5
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DOI: https://doi.org/10.1007/s10668-023-03103-5