Abstract
Using data from non-financial listed firms in China from 2008 to 2020, this study investigates the effect of the new Environmental Protection Law on corporate financialization based on the difference-in-differences model. Findings show that the law’s implementation significantly increases the financialization behaviors of corporations in polluting industries. This effect remains robust after a series of robustness checks. Heterogeneity analyses suggest that the policy effect of the law is more pronounced for non-state-owned enterprises, enterprises with high fixed assets ratios, and enterprises in regions with excellent market competition. The new Environmental Protection Law also promotes the financialization of enterprises by increasing costs, reducing commercial credit financing capabilities, increasing risks, and hindering innovation. This article provides new evidence for understanding macro-environmental regulation and micro-firm effects.
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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.
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Acknowledgements
We thank the support provided by the Natural Science Foundation of Guangdong Province of China [Grant No. 2021B1515020103], Outstanding Innovative Talents Cultivation Funded Programs for Doctoral Students of Jinan University [Grant No. 2021CXB025], Natural Science Foundation of Guangdong Province [Grant No. 2020A151501559], Key Project of Research Base of Humanities and Social Sciences of Guangdong Province [Grant No. 19JDZD05].
Funding
Natural Science Foundation of Guangdong Province of China [Grant No. 2021B1515020103]. Outstanding Innovative Talents Cultivation Funded Programs for Doctoral Students of Jinan University [Grant No. 2021CXB025]. Natural Science Foundation of Guangdong Province [Grant No. 2020A151501559]. Key Project of Research Base of Humanities and Social Sciences of Guangdong Province [Grant No. 19JDZD05].
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G.X. conceived and designed conceptualization, methodology, investigation, project administration, and writing the original draft. Y.Y. performed the experiments and wrote the the original draft. K.J. analyzed the data. Z.C. performed supervision, writing-review & editing. All authors read and approved the final manuscript.
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Xie, G., Yang, Y., Jiang, K. et al. The effect of the new Environmental Protection Law on corporate financialization in China. Environ Sci Pollut Res 29, 83596–83611 (2022). https://doi.org/10.1007/s11356-022-21639-3
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DOI: https://doi.org/10.1007/s11356-022-21639-3