IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v86y2025ipes1544612325019178.html

Impact of the environmental protection law on corporate biodiversity risk attention - An empirical analysis based on data of Chinese listed companies

Author

Listed:
  • Zhou, Xijin
  • Lin, Deqin

Abstract

China introduced the directive-based Environmental Protection Law (EPL) in 2015 to improve and protect the environment. This paper uses the data of Chinese listed companies from 2010 to 2023 to construct a difference-in-differences model and finds that the implementation of the EPL promotes biodiversity risk attention among enterprises in biodiversity-sensitive industries. Furthermore, ESG performance and executives' environmental awareness play a mediating effect in this relationship. The heterogeneity analysis reveals that the EPL has a more significant impact on the attention paid by state-owned enterprises and enterprises participating in the carbon emission rights trading pilot program to the biodiversity risk. This paper provides relevant evidence for further incorporating biodiversity risk into the enterprise assessment standards.

Suggested Citation

  • Zhou, Xijin & Lin, Deqin, 2025. "Impact of the environmental protection law on corporate biodiversity risk attention - An empirical analysis based on data of Chinese listed companies," Finance Research Letters, Elsevier, vol. 86(PE).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pe:s1544612325019178
    DOI: 10.1016/j.frl.2025.108663
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325019178
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.108663?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Zhao, Yinghan & Qu, Xiaoyu & Lucey, Brian, 2025. "Managerial myopia and biodiversity alignment- evidence from China," International Review of Financial Analysis, Elsevier, vol. 100(C).
    2. Chen, Yinying & Yin, Liang & Hu, Shiyang & Li, Xiang, 2025. "Biodiversity conservation and corporate environmental information disclosure: Evidence from a quasi-natural experiment in China," International Review of Financial Analysis, Elsevier, vol. 102(C).
    3. Cesar de Oliveira, Susan E.M. & Nakagawa, Louise & Lopes, Gabriela Russo & Visentin, Jaqueline C. & Couto, Matheus & Silva, Daniel E. & d'Albertas, Francisco & Pavani, Bruna F. & Loyola, Rafael & West, 2024. "The European Union and United Kingdom's deforestation-free supply chains regulations: Implications for Brazil," Ecological Economics, Elsevier, vol. 217(C).
    4. Azizi, Leyla & Scope, Christoph & Ladusch, Anne & Sassen, Remmer, 2025. "Biodiversity disclosure in the European finance sector," Ecological Economics, Elsevier, vol. 228(C).
    5. Tu, Zhengge & Cao, Yu & Goh, Mark & Wang, Yujia, 2024. "Executive green cognition and corporate ESG performance," Finance Research Letters, Elsevier, vol. 69(PB).
    6. Zhou, Chengchen & Chen, Yajie & Ji, Qiang & Zhang, Dayong, 2025. "Does public attention to biodiversity matter to stock markets?," International Review of Financial Analysis, Elsevier, vol. 98(C).
    7. Nie, Cong & Zhang, Chen, 2025. "Low-carbon production and corporate biodiversity concern: Evidence from Chinese manufacturing firms," Finance Research Letters, Elsevier, vol. 77(C).
    8. Da Gao & Linfang Tan & Yue Chen, 2025. "Smarter is greener: can intelligent manufacturing improve enterprises’ ESG performance?," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-12, December.
    9. Adamolekun, Gbenga, 2024. "Firm biodiversity risk, climate vulnerabilities, and bankruptcy risk," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 97(C).
    10. Hu, Bin & Xu, Qian, 2025. "Environmental regulation penalties and corporate environmental information disclosure," International Review of Economics & Finance, Elsevier, vol. 102(C).
    11. Ma, Fenfen & Saleem, Hummera & Ding, Xueting & Nazir, Sidra & Tariq, Salman, 2024. "Do natural resource rents, green technological innovation, and renewable energy matter for ecological sustainability? Role of green policies in testing the environmental kuznets curve hypothesis," Resources Policy, Elsevier, vol. 91(C).
    12. Zhang, Zhaoguo & Cheng, Juan & Xu, Yaqin, 2025. "Executives’ ESG cognition, ESG responsibility fulfillment, and corporate competitive advantage: Evidence from China," Finance Research Letters, Elsevier, vol. 83(C).
    13. Da Gao & Xinlin Mo & Ruochan Xiong & Zhiliang Huang, 2022. "Tax Policy and Total Factor Carbon Emission Efficiency: Evidence from China’s VAT Reform," IJERPH, MDPI, vol. 19(15), pages 1-17, July.
    14. Da Gao & Tianyi Zhang & Xiaowei Liu, 2025. "The Urban Renewable Energy Transition: Impact Assessment and Transmission Mechanisms of Climate Policy Uncertainty," Energies, MDPI, vol. 18(8), pages 1-18, April.
    15. Liang, Chao & Yang, Jinyu & Shen, Lihua & Dong, Dayong, 2024. "The role of biodiversity risk in stock price crashes," Finance Research Letters, Elsevier, vol. 67(PA).
    16. Orazalin, Nurlan S. & Ntim, Collins G. & Kalimilo Malagila, John, 2025. "Corporate governance, national governance quality, and biodiversity reporting: Global evidence," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 58(C).
    17. Da Gao & Linfang Tan & Yue Chen, 2025. "Unlocking Carbon Reduction Potential of Digital Trade: Evidence from China’s Comprehensive Cross-border E-Commerce Pilot Zones," SAGE Open, , vol. 15(1), pages 21582440251, February.
    18. He, Feng & Chen, Longxuan & Lucey, Brian M., 2024. "Chinese corporate biodiversity exposure," Finance Research Letters, Elsevier, vol. 70(C).
    Full references (including those not matched with items on IDEAS)

    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. Liu, Jinglin & Xing, Xiaoyun & Chen, Guorong & Zhang, Yang, 2026. "Biodiversity risk as a financial threat: Evidence from AFHF sectors using QVAR networks," Finance Research Letters, Elsevier, vol. 87(C).
    2. Li, Peigong & Shahzad, Umeair, 2026. "Corporate biodiversity risk exposure in China: A system-based perspective from natural capital theory using machine and deep learning algorithms," Ecological Economics, Elsevier, vol. 242(C).
    3. Guo, Hongyu & Rahmoune, Mbarek & Hunjra, Ahmed Imran & Xu, Xiaoli, 2026. "Leveraging digital-green finance synergies to accelerate biodiversity conservation and sustainability," Research in International Business and Finance, Elsevier, vol. 83(C).
    4. He, Feng & Wei, Chunyang & Lucey, Brian & Hao, Jing, 2025. "Beyond greenwashing: How does firm-level biodiversity disclosure affect corporate sustainability strategy?," Pacific-Basin Finance Journal, Elsevier, vol. 92(C).
    5. Tran, Thanh Tat & Hoang, Khanh & Ngo, Thanh & Nguyen, Thang Xuan & Tran, Hien Thi Thu, 2025. "How does biodiversity risk exposure affect corporate regulatory intensity?," Finance Research Letters, Elsevier, vol. 86(PB).
    6. Pi, Tianlei & Jiao, Linke & Zhou, Yuhan & Shi, Jin, 2026. "Biodiversity risk and corporate greenwashing: Evidence from China," Research in International Business and Finance, Elsevier, vol. 83(C).
    7. Yin, Libo & Zhu, Xiaoye & Li, Jingtian, 2025. "Does exposure to biodiversity risk drive firms’ digital transformation?," Finance Research Letters, Elsevier, vol. 82(C).
    8. Eren Erkılıç & Cengiz Gazeloğlu & Ece Özgören Ünlü, 2025. "Renewable Energy Solution to Carbon Emissions: BRICS Countries in the Grip of Globalization and Economic Growth," Sustainability, MDPI, vol. 17(9), pages 1-24, May.
    9. Pi, Tianlei & Jiao, Linke & Zhou, Yuhan & Shi, Jin, 2025. "Can biodiversity risk improve firm ESG performance? Empirical evidence from China," Finance Research Letters, Elsevier, vol. 76(C).
    10. Da Gao & Qingshuo Wang & Qingjiang Han, 2025. "How Does Critical Peak Pricing Boost Urban Green Total Factor Energy Efficiency? Evidence from a Double Machine Learning Model," Energies, MDPI, vol. 18(18), pages 1-21, September.
    11. Yang, Guang & Li, Yu, 2025. "Research on biodiversity risk and corporate short-term debt for long-term use under disclosure regulation," Finance Research Letters, Elsevier, vol. 77(C).
    12. Li, Jun & Jin, Yihang & Zhou, Peng, 2025. "Do banks price firms' biodiversity risk? Evidence from the Kunming declaration," International Review of Financial Analysis, Elsevier, vol. 106(C).
    13. Wei, Wenwan & Yang, Sini, 2025. "Study on the factors and paths of optimizing and upgrading the regional industrial structure: A hybrid analysis based on extended NCA and fsQCA," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 2083-2102.
    14. Deng, Xiaomeng & Zhang, Pengwei & Wu, You, 2026. "Threat or opportunity: Biodiversity risk and corporate investment," Finance Research Letters, Elsevier, vol. 89(C).
    15. Zhang, Min & Chen, Guorong & Deng, Jing, 2025. "Does biodiversity attention affect risk spillover in the AFHF sectors?—Evidence from Chinese stock markets," Finance Research Letters, Elsevier, vol. 82(C).
    16. Di Tommaso, Caterina & Foglia, Matteo & Pacelli, Vincenzo, 2025. "The impact of biodiversity score on the European firm’s performance," International Review of Financial Analysis, Elsevier, vol. 106(C).
    17. Zhang, Xingyan & He, Yu, 2026. "Spatial impact of green finance reform and innovation pilot zones on industrial structure upgrading in China," Finance Research Letters, Elsevier, vol. 92(C).
    18. Naifar, Nader, 2025. "Biodiversity finance, green bonds, and tokenized carbon: a Quantile-on-Quantile connectedness analysis," Finance Research Letters, Elsevier, vol. 85(PB).
    19. Sun, Wenjie & Mei, Jianhua & Chen, Kecun & Li, Zhaoqi, 2025. "Biodiversity risk and value creation in emerging markets," Finance Research Letters, Elsevier, vol. 85(PC).
    20. Salim Bagadeem & Salem Hamad Aldawsari, 2026. "Mitigating Corporate Biodiversity Risk through Green Finance: The Role of Green Development and Climate Risk in the USA," Advances in Decision Sciences, Asia University, Taiwan, vol. 30(2), pages 258-301, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:86:y:2025:i:pe:s1544612325019178. 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.