Does ecology protection conflict with corporate development? Evidence from biodiversity and corporate total factor productivity in China

This study uses China's National Park System policy (NPS policy) as an exogenous shock for Chinese listed firms and investigates the causal relationship between biodiversity conservation on corporate total factor productivity. Using a staggered Difference-in-Differences (DID) model, our results reveal a significant causal increase in the total factor productivity of firms treated by the NPS policy. Further analyses confirm that improving green technological innovation and optimizing the efficiency of resource allocation under environmental regulation with punitive and supportive tactics by government are important transmission channels. Moreover, this positive impact of the NPS policy on total factor productivity is more pronounced for jurisdictions with greater ecological protection motivation by local government, regions with intenser public concern for biodiversity, or firms with higher biodiversity awareness. Our findings highlight the importance of valuing biodiversity protection practices to promote a win-win situation between environment and economy development.