IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v160y2026ics0264999326001379.html

When green certification pays off: Financial returns from environmental regulation compliance

Author

Listed:
  • Mu, Yifei
  • Wang, Weining

Abstract

Using data on Chinese A-share listed firms from 2010 to 2023, this study examines the impact of green factory certification under China's green manufacturing demonstration program on corporate financial performance. Employing a staggered differences-in-differences model, we find that certification significantly improves firm financial performance. Mechanism analyses indicate that green factory certification enhances financial performance by promoting green innovation and attracting green investors, thereby generating economic benefits. The positive effects are more pronounced for firms with multiple certifications, no environmental violations, higher regional environmental awareness, and those in heavily polluting industries. Further analysis shows that green factory certification mitigates the negative impact of extreme weather on corporate financial performance. This study provides micro-level evidence on how voluntary environmental regulation affects firm performance.

Suggested Citation

  • Mu, Yifei & Wang, Weining, 2026. "When green certification pays off: Financial returns from environmental regulation compliance," Economic Modelling, Elsevier, vol. 160(C).
    • Handle: RePEc:eee:ecmode:v:160:y:2026:i:c:s0264999326001379
    DOI: 10.1016/j.econmod.2026.107608
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999326001379
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2026.107608?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:ecmode:v:160:y:2026:i:c:s0264999326001379. 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/inca/30411 .

    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.