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Government myopia and corporate environmental investment: Evidence from urban policy text analysis

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  • Wang, Yaxin
  • Wang, Siyu
  • Li, Yan

Abstract

This study examines the impact of local governments’ short-term orientation on corporate environmental investment and its underlying mechanisms. Using data from Chinese nonfinancial A-share listed firms spanning 2014–2024, government myopia significantly suppresses corporate environmental investment. Specifically, local governments’ short-term performance orientation indirectly weakens firms’ environmental investments by influencing managerial short-termism and profit orientation. Moreover, local digital infrastructure focus and corporate pollution intensity have notable moderating roles in the relationship between government myopia and environmental investment, enhancing the negative effect of government myopia on corporate environmental investment. This study provides theoretical insights for policymakers to optimize local environmental policies, particularly balancing short-term performance pressure with long-term environmental goals, and offers new perspectives for corporate green investment decisions.

Suggested Citation

  • Wang, Yaxin & Wang, Siyu & Li, Yan, 2026. "Government myopia and corporate environmental investment: Evidence from urban policy text analysis," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612326001145
    DOI: 10.1016/j.frl.2026.109583
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