The Journal of Asian Finance, Economics and Business

Korea Distribution Science Association (한국유통과학회)
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Listed Local State-Owned Enterprises and Environmental Performance: Evidence from China

  • TANG, Kai (Department of Accounting, College of Business, Chungbuk National University) ;
  • BAE, Khee Su (Department of Accounting, College of Business, Chungbuk National University)
  • Received : 2020.11.05
  • Accepted : 2021.01.08
  • Published : 2021.02.28
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Abstract

The paper examines the influence of ownership type on environmental performance of Chinese listed enterprises. China's environmental problems are attributed to the collusion between enterprises and economy-oriented local governments, which has allowed many companies to skirt environmental regulations. Especially, local state-owned enterprises (SOEs) tend to have worse environmental performance than private firms, under the wing of local governments, with whom they have a closer political connection. According to the report of the Environmental Protection Agency, currently the unacceptably poor environmental performance of local SOEs has severely hampered the realization of green economy in China. After examining the dataset of 15,996 firm-year observations from 2,688 listed firms, this paper found that, in the presence of central government supervision and personnel intervention, listed local SOEs will be forced to improve their environmental performance in accordance with standards set by the central government, which leads to better environmental performance than that of listed private firms (private firms). The result of two-stage regression also supports the conclusion. This shows increased supervision and personnel intervention from the central government can significantly improve the environmental performance of local SOEs. The research in this paper expects to make a contribution to attaining the goal of green economy in China.

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References

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