IDEAS home Printed from https://ideas.repec.org/a/eee/asieco/v100y2025ics1049007825001113.html
   My bibliography  Save this article

Environmental justice, ethical transformation: Environmental courts and corporate ESG performance

Author

Listed:
  • Cui, Huan-yu
  • Cao, Yue-qun

Abstract

This study leverages the staggered implementation of specialized environmental courts throughout China as an exogenous shock to explore their influence on firms’ ESG performance. Analyzing a dataset of Chinese publicly listed firms from 2009 to 2022, the results demonstrate that (1) these courts enhance firms’ ESG outcomes. The key conclusions remain consistent even after addressing potential endogeneity issues and mitigating TWFE bias. (2) Low managerial ownership ratios, high analyst attention, and environmental uncertainty drive the effect. (3) The primary channel is that environmental courts enhance environmental penalties, deterring local firms and leading to stronger environmental behavior and improved access to bank loans. (4) The effect is more pronounced in polluting, environmentally information-transparent, financially constrained firms, and cities with deliberative courts, strong public participation, and efficient financial environments. Overall, this study offers new perspectives to the legal and financial discourse, reinforcing the broader role of environmental justice in shaping ethical corporate behavior.

Suggested Citation

  • Cui, Huan-yu & Cao, Yue-qun, 2025. "Environmental justice, ethical transformation: Environmental courts and corporate ESG performance," Journal of Asian Economics, Elsevier, vol. 100(C).
    • Handle: RePEc:eee:asieco:v:100:y:2025:i:c:s1049007825001113
    DOI: 10.1016/j.asieco.2025.101987
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1049007825001113
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.asieco.2025.101987?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:asieco:v:100:y:2025:i:c:s1049007825001113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/asieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.