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The warning of haze: weather and corporate investment

Author

Listed:
  • Xiuping Zhang
  • Shouyang Wang
  • Qingbin Meng
  • Weixing Wu

Abstract

This paper investigates whether air quality affects corporate investment. Using a sample of Chinese A‐share listed firms from 2007 to 2013, this paper finds that poor air quality is negatively associated with corporate investment and reduction of corporate investment due to air pollution intensifies with manager risk aversion. In addition, this paper provides evidence against the alternative explanation that corporate investment decreases due to government air‐quality regulations. Furthermore, this paper also suggests that poor air quality is negatively associated with investment efficiency. These findings complement existing literature on how weather conditions affect corporate financial decisions.

Suggested Citation

  • Xiuping Zhang & Shouyang Wang & Qingbin Meng & Weixing Wu, 2019. "The warning of haze: weather and corporate investment," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(5), pages 3029-3052, December.
    • Handle: RePEc:bla:acctfi:v:59:y:2019:i:5:p:3029-3052
    DOI: 10.1111/acfi.12566
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    Cited by:

    1. Zhidong Tan & Jianhua Tan & Kam C. Chan, 2021. "Seeing is believing? The impact of air pollution on corporate social responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 525-534, January.
    2. Baohua Liu & Junfeng Wu & Kam C. Chan, 2021. "Does air pollution change a firm's business strategy for employing capital and labor?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3671-3685, December.
    3. Jiang, Kangqi & Chen, Zhongfei & Rughoo, Aarti & Zhou, Mengling, 2022. "Internet finance and corporate investment: Evidence from China," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 77(C).
    4. Kai Zhao & Bintong Yu & Xiaoting Yang, 2023. "The Agricultural–Ecological Benefit of Digital Inclusive Finance Development: Evidence from Straw Burning in China," Sustainability, MDPI, vol. 15(4), pages 1-14, February.

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