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The impact of environmental concern on cross-regional investment: Evidence from Chinese new energy enterprises

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  • Mao, Qilin
  • Guo, Chongyang

Abstract

To achieve carbon peaking and carbon neutrality goals, local governments in China are actively exploring sustainable economic growth models. Utilizing data from China's A-share listed companies in the new energy vehicle industry chain and local government work reports, we demonstrate that the difference in government environmental concern (GEC) between the parent firm city and the destination city significantly drives new energy enterprises (NEEs) to establish off-site subsidiaries. This effect operates through transcending administrative barriers, transmitting policy signals, and stimulating firms' strategic expansion. Further analysis reveals that the investment location choices of midstream and downstream NEEs are significantly influenced by the difference in GEC, whereas the investment decisions of upstream NEEs are not. Unlike previous studies that focus on the relationship between the location of highly polluting firms and pollution transfer, this paper specializes in NEEs and explores how environmental concern facilitates the high-quality development of emerging industries.

Suggested Citation

  • Mao, Qilin & Guo, Chongyang, 2026. "The impact of environmental concern on cross-regional investment: Evidence from Chinese new energy enterprises," China Economic Review, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:chieco:v:95:y:2026:i:c:s1043951x25003050
    DOI: 10.1016/j.chieco.2025.102647
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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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