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Does environmental regulation complement ESG Disclosure? Evidence from the emergence of pollution emission permits regime in China

Author

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  • Li, Yafei
  • Zeng, James Si
  • Jiang, Shaoxiang

Abstract

Using the staggered adoption of the Pollution Emission Permit as a quasi-natural experiment, we examine whether environmental regulations and ESG disclosures can complement each other. Our findings reveal that this policy reduces pollution among Chinese listed corporations while enhancing the accuracy and quality of ESG disclosures.

Suggested Citation

  • Li, Yafei & Zeng, James Si & Jiang, Shaoxiang, 2025. "Does environmental regulation complement ESG Disclosure? Evidence from the emergence of pollution emission permits regime in China," Economics Letters, Elsevier, vol. 254(C).
    • Handle: RePEc:eee:ecolet:v:254:y:2025:i:c:s0165176525002794
    DOI: 10.1016/j.econlet.2025.112442
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    References listed on IDEAS

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    1. Hart, Oliver D. & Zingales, Luigi, 2017. "Companies Should Maximize Shareholder Welfare Not Market Value," Working Papers 267, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    2. Li, Panni & Yao, Shouyu & Fan, Lin & Yin, Shihao & Du, Huibin, 2024. "Government certified environmental labels and trade credit: Evidence from green factories," Economics Letters, Elsevier, vol. 244(C).
    3. Hart, Oliver & Zingales, Luigi, 2017. "Companies Should Maximize Shareholder Welfare Not Market Value," Journal of Law, Finance, and Accounting, now publishers, vol. 2(2), pages 247-275, November.
    4. Zhang, Xiaoke & Zhao, Xuankai & Qu, Linshan, 2021. "Do green policies catalyze green investment? Evidence from ESG investing developments in China," Economics Letters, Elsevier, vol. 207(C).
    5. Zeng, James Si & Jiang, Shaoxiang, 2024. "Do state-owned institutional investors care more about ESG? Evidence from China," Finance Research Letters, Elsevier, vol. 67(PB).
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    Cited by:

    1. Jiang, Jianing & Xia, Ziyuan, 2025. "From guerrilla warfare legacy to green transparency: The lasting impact of collectivism on corporate environmental disclosure," Economics Letters, Elsevier, vol. 255(C).

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    Keywords

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    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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