IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v53y2023ics1544612323000508.html
   My bibliography  Save this article

The relationship between public participation in environmental governance and corporations’ environmental violations

Author

Listed:
  • Zhang, Hao
  • Tao, Lunchen
  • Yang, Biyun
  • Bian, Wenlong

Abstract

We explore the relationship in China between public participation in environmental governance and corporations’ environmental violations. We do so by collecting data on unlisted corporations’ environmental violations from 2012 to 2015 and manually matching these data with the number of environment-related proposals made by People's Congress deputies of different provinces. We find that public participation in environmental governance significantly decreases the number of environmental violations by corporations. We use the Eco-environmental Credit Policy as a policy shock in a difference-in-differences regression to confirm our finding. We conclude that public participation in environmental governance increases the number of local environmental regulations and thus restrains environmental violations by corporations.

Suggested Citation

  • Zhang, Hao & Tao, Lunchen & Yang, Biyun & Bian, Wenlong, 2023. "The relationship between public participation in environmental governance and corporations’ environmental violations," Finance Research Letters, Elsevier, vol. 53(C).
    • Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000508
    DOI: 10.1016/j.frl.2023.103676
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612323000508
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2023.103676?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Willett, Keith & Caplanova, Anetta, 2022. "Pollution and environmental quality violations: Finding the right emission permit prices for NO2 EDPs," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    2. Zhang, Hua & Xu, Tiantian & Feng, Chao, 2022. "Does public participation promote environmental efficiency? Evidence from a quasi-natural experiment of environmental information disclosure in China," Energy Economics, Elsevier, vol. 108(C).
    3. Ma, Xin & Fan, Di & Zhou, Yi & Yang, Cheng-Hu, 2021. "The impact of inspection on the sustainable production strategy: Environmental violation and abatement in emerging markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 150(C).
    4. Xiong, Yangchun & Lam, Hugo K.S. & Hu, Qiaoxuan & Yee, Rachel W.Y. & Blome, Constantin, 2021. "The financial impacts of environmental violations on supply chains: Evidence from an emerging market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 151(C).
    5. Brady, Jacob & Evans, Mary F. & Wehrly, Eric W., 2019. "Reputational penalties for environmental violations: A pure and scientific replication study," International Review of Law and Economics, Elsevier, vol. 57(C), pages 60-72.
    6. Klerman, Daniel, 2020. "Comment on Brady, Evans & Wehrly, reputational penalties for environmental violations: A pure and scientific replication study," International Review of Law and Economics, Elsevier, vol. 63(C).
    7. Liao, Xianchun & Shi, Xunpeng (Roc), 2018. "Public appeal, environmental regulation and green investment: Evidence from China," Energy Policy, Elsevier, vol. 119(C), pages 554-562.
    8. Chen, Zhao & Kahn, Matthew E. & Liu, Yu & Wang, Zhi, 2018. "The consequences of spatially differentiated water pollution regulation in China," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 468-485.
    9. Zhao, Li & Zhang, Ling & Sun, Jianxin & He, Pengfei, 2022. "Can public participation constraints promote green technological innovation of Chinese enterprises? The moderating role of government environmental regulatory enforcement," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    10. Costa-Campi, M.T. & García-Quevedo, J. & Martínez-Ros, E., 2017. "What are the determinants of investment in environmental R&D?," Energy Policy, Elsevier, vol. 104(C), pages 455-465.
    11. Zhang, Guoxing & Deng, Nana & Mou, Haizhen & Zhang, Zhe George & Chen, Xiaofeng, 2019. "The impact of the policy and behavior of public participation on environmental governance performance: Empirical analysis based on provincial panel data in China," Energy Policy, Elsevier, vol. 129(C), pages 1347-1354.
    12. Cai, Hongbin & Chen, Yuyu & Gong, Qing, 2016. "Polluting thy neighbor: Unintended consequences of China׳s pollution reduction mandates," Journal of Environmental Economics and Management, Elsevier, vol. 76(C), pages 86-104.
    13. Shahab, Yasir & Hussain, Tanveer & Wang, Peng & Zhong, Ma & Kumar, Satish, 2023. "Business groups and environmental violations: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 85(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xingqiang Du & Yiqi Zhang & Shaojuan Lai & Hexin Tao, 2024. "How Do Auditors Value Hypocrisy? Evidence from China," Journal of Business Ethics, Springer, vol. 191(3), pages 501-533, May.
    2. Birindelli, Giuliana & Miazza, Aline & Paimanova, Viktoriia & Palea, Vera, 2023. "Just “blah blah blah”? Stock market expectations and reactions to COP26," International Review of Financial Analysis, Elsevier, vol. 88(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tao, Yunqing & Wang, Dianjie & Ye, Yongwei & Wu, Haitao & Zhang, Yao, 2023. "The role of public environmental concern on corporate social responsibility: Evidence from search index of web users," Energy Economics, Elsevier, vol. 126(C).
    2. Pan, Dan & Chen, Huan, 2021. "Border pollution reduction in China: The role of livestock environmental regulations," China Economic Review, Elsevier, vol. 69(C).
    3. Zhao, Li & Zhang, Ling & Sun, Jianxin & He, Pengfei, 2022. "Can public participation constraints promote green technological innovation of Chinese enterprises? The moderating role of government environmental regulatory enforcement," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    4. Shiyu Bo, 2021. "Environmental Regulations, Political Incentives and Local Economic Activities: Evidence from China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(3), pages 812-835, June.
    5. Youmeng Wu & Hao Sun & Hongliang Sun & Chi Xie, 2022. "Impact of Public Environmental Concerns on the Digital Transformation of Heavily Polluting Enterprises," IJERPH, MDPI, vol. 20(1), pages 1-19, December.
    6. Ying She & Yaobin Liu & Yangu Deng & Lei Jiang, 2020. "Can China’s Government-Oriented Environmental Regulation Reduce Water Pollution? Evidence from Water Pollution Intensive Firms," Sustainability, MDPI, vol. 12(19), pages 1-19, September.
    7. Mengxue Ji & Zhenming Wu & Dandan Zhu, 2023. "Environmental Vertical Management and Enterprises’ Performance: Evidence from Water Pollution Reduction in China," Sustainability, MDPI, vol. 15(19), pages 1-17, September.
    8. Chen, Dengke & Chen, Shiyi & Jin, Hao & Lu, Yulin, 2020. "The impact of energy regulation on energy intensity and energy structure: Firm-level evidence from China," China Economic Review, Elsevier, vol. 59(C).
    9. Qihang Xue & Caiquan Bai & Weiwei Xiao, 2022. "Fintech and corporate green technology innovation: Impacts and mechanisms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3898-3914, December.
    10. Yue Hua & Mark Partridge & Weizeng Sun, 2023. "Pollution effects of place‐based policy: Evidence from China's development‐zone program," Journal of Regional Science, Wiley Blackwell, vol. 63(3), pages 703-727, June.
    11. Garg, Teevrat & Hamilton, Stuart E. & Hochard, Jacob P. & Kresch, Evan Plous & Talbot, John, 2018. "(Not so) gently down the stream: River pollution and health in Indonesia," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 35-53.
    12. Zengming Wu & Mengnan Zhu, 2022. "More air pollution control, less industrial land leasing? Empirical evidence from microland transactions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 647-658, April.
    13. Ruiqian Li & Ramakrishnan Ramanathan & Guanghua Xu, 2023. "The impact of penalties for environmental violations on corporate environmental responsibility," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(3), pages 1343-1363, June.
    14. Libin Han & Chong Peng, 2022. "Do the Age and Gender of Chairperson Affect Firms’ Environmental Protection Investment?," IJERPH, MDPI, vol. 19(21), pages 1-12, November.
    15. Li, Ge & Wen, Huwei, 2023. "The low-carbon effect of pursuing the honor of civilization? A quasi-experiment in Chinese cities," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 343-357.
    16. Guanyi Yu & Chunliang Xiu & Changsong Zhao & Zhengliang Ding, 2018. "Strategic Cross-Border Water Pollution in Songliao Basin," Sustainability, MDPI, vol. 10(12), pages 1-19, December.
    17. Jia Xu & Jiuchang Wei & Haipeng (Allan) Chen, 2019. "Strategic responses of stigmatized Chinese manufacturing firms to formal and informal environmental regulative pressures through enhanced corporate social responsibility effort," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(6), pages 1235-1260, November.
    18. Kou, Po & Shi, Jianhua, 2024. "Dynamic evolution of China's government environmental regulation capability and its impact on the coupling coordinated development of the economy-environment," Socio-Economic Planning Sciences, Elsevier, vol. 91(C).
    19. Xu Ou & Haiwei Jiang, 2023. "The Impact of Environmental Regulation on Firm Performance: Evidence from the Pulp and Paper Industry in China," IJERPH, MDPI, vol. 20(4), pages 1-18, February.
    20. Yaoxiaoxue Hong & Xianling Jiang & Beibei Shi & Chang Yu, 2022. "Do Fiscal Environmental Protection Expenditures Crowd Out Corporate Environmental Protection Investments?," Sustainability, MDPI, vol. 14(20), pages 1-23, October.

    More about this item

    Keywords

    Public participation; Environmental governance; Corporations’ environmental violations; Environmental regulations;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • 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

    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:finlet:v:53:y:2023:i:c:s1544612323000508. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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/frl .

    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.