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Establishment of environmental protection courts and corporate foreign investment behavior

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Listed:
  • Yang, Rui
  • Wang, Jiaqi

Abstract

This paper explores how the establishment of environmental protection courts affects the foreign investment behavior of non-financial companies listed on the Shanghai and Shenzhen A-shares. Using a multiple regression econometric model, the study finds that establishing these courts significantly boosts foreign investment activities. This effect remains consistent across various robustness tests. Furthermore, moderating effect tests reveal that the positive impact is stronger for non-state-owned and heavily polluting enterprises. These results suggest that corporate ownership type and industry characteristics play a critical role in how environmental protection courts influence foreign investment behavior.

Suggested Citation

  • Yang, Rui & Wang, Jiaqi, 2024. "Establishment of environmental protection courts and corporate foreign investment behavior," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324011541
    DOI: 10.1016/j.frl.2024.106125
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    References listed on IDEAS

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    1. Zhao, Wenqi & Toh, Moau Yong & Zhang, Yongmin, 2025. "The price of green justice: Environmental courts and cross-regional capital immobility," Finance Research Letters, Elsevier, vol. 85(PA).
    2. Yu, Qing-rui & Cheng, Yan-chen, 2025. "The impact of sustainable cities construction on foreign divestment: Empirical evidence from low-carbon city pilot in China," Finance Research Letters, Elsevier, vol. 82(C).
    3. Liu, Zilong & Chen, Rungen & Chen, Yu & Ye, Qian & Fang, Kanglan, 2025. "Law and governance in environmental oversight: The role of environmental courts in enhancing corporate information transparency," Finance Research Letters, Elsevier, vol. 80(C).
    4. Yu, Lianchao & Zhu, Lele & Dong, Jinting, 2026. "The dark side of environmental judicial specialization: Corporate labor income share in China," Economic Modelling, Elsevier, vol. 155(C).

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