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Yesterday once more: The impacts of environmental regulations on multinational corporations’ reinvestment allocation in China

Author

Listed:
  • Yan, Bing
  • Guo, Shaoyu
  • Jiang, Xiaojing
  • Jin, Wei

Abstract

This study examines the influence of China’s 11th Five-Year Plan on multinational corporations’ reinvestment strategies, particularly in response to escalating environmental regulations. We utilize a difference-in-differences model, analyzing multinational firms’ investment behaviors and environmental compliance from 1998 to 2010. Our findings reveal a trend towards reallocating investments to cities with more lenient environmental policies and industries with lower pollution intensity, especially for firms from countries with stricter environmental standards. The research highlights how environmental regulations shape multinational investment decisions in China.

Suggested Citation

  • Yan, Bing & Guo, Shaoyu & Jiang, Xiaojing & Jin, Wei, 2026. "Yesterday once more: The impacts of environmental regulations on multinational corporations’ reinvestment allocation in China," Journal of Environmental Economics and Management, Elsevier, vol. 138(C).
    • Handle: RePEc:eee:jeeman:v:138:y:2026:i:c:s0095069626000574
    DOI: 10.1016/j.jeem.2026.103337
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    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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