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Geopolitical Risk and Corporate Environmental Performance

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  • Lin Zhang

Abstract

This paper takes Shanghai and Shenzhen A‐share listed companies in China from 2008 to 2020 as the research sample (26,805 observations) to systematically examine the impact of geopolitical risks on corporate environmental performance. Based on panel data, a fixed‐effects regression model is constructed, and a variety of robustness test methods are employed to verify the research conclusions, including the one‐period lag of the core explanatory variable, the instrumental variable method, eliminating the impact of economic policy uncertainty, and constructing a difference‐in‐differences model. Empirical results show that geopolitical risks significantly improve corporate environmental performance. Mechanism analysis reveals that geopolitical risks promote environmental performance mainly by enhancing enterprises' green innovation capabilities and improving resource allocation efficiency. Heterogeneity analysis further indicates that for enterprises with higher analyst attention, stronger innovation capacity, lower financial mismatch, and higher total factor productivity, the positive impact of geopolitical risks on their environmental performance is more significant. This paper not only reveals the internal mechanism by which geopolitical risks affect corporate environmental performance but also provides a scientific basis for governments to formulate relevant policies and for enterprises to enhance their green competitiveness.

Suggested Citation

  • Lin Zhang, 2026. "Geopolitical Risk and Corporate Environmental Performance," Bulletin of Economic Research, Wiley Blackwell, vol. 78(2), pages 385-409, April.
    • Handle: RePEc:bla:buecrs:v:78:y:2026:i:2:p:385-409
    DOI: 10.1111/boer.70030
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    References listed on IDEAS

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