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Front-end or end-of-pipe? the impact of the government focus on corporate environmental investment choices

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  • Liu, Ke
  • Cao, Linjun
  • Zhou, Jian

Abstract

Drawing on neoinstitutional theory, this study examines how government environmental attention shapes firms’ heterogeneous environmental strategies using data on Chinese listed companies from 2008 to 2022. The results show that such attention significantly encourages firms to adopt front-end prevention strategies while exerting no meaningful effect on end-of-pipe treatment strategies, underscoring its value for microlevel environmental governance. The facilitating effect is stronger among firms with limited cost-transfer capabilities and in regions with high public environmental demands. Resource compensation and regulatory constraints further operate as core mechanisms through which government environmental attention influences firms’ adoption of front-end prevention strategies.

Suggested Citation

  • Liu, Ke & Cao, Linjun & Zhou, Jian, 2026. "Front-end or end-of-pipe? the impact of the government focus on corporate environmental investment choices," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612326000619
    DOI: 10.1016/j.frl.2026.109530
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    References listed on IDEAS

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