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Ecological rule of law, financial constraints, and investment in heavily polluting enterprises

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  • Chen, Cong
  • Li, Qing

Abstract

Based on a quasi-natural experiment of China's pilot policy for procuratorial administrative public interest litigation in 2015, this paper systematically examines the impact of strengthened ecological rule of law on the investment levels of heavily polluting enterprises and its underlying mechanisms. The following conclusions are drawn: Ecological rule of law significantly inhibits the investment of heavily polluting enterprises; financing constraints play a significant mediating role; and there is property rights heterogeneity in the policy effects. The research provides empirical evidence for improving the ecological rule of law system with Chinese characteristics and promoting corporate green transformation.

Suggested Citation

  • Chen, Cong & Li, Qing, 2025. "Ecological rule of law, financial constraints, and investment in heavily polluting enterprises," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s1544612325013650
    DOI: 10.1016/j.frl.2025.108108
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    References listed on IDEAS

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