How public attention drives corporate environmental protection: Effects and channels

Elucidating how public attention drives corporate environmental protection behavior is critical for sustainable development. Thus, this study constructs an instrumental variable for public attention and also regresses the related effects and channels of public attention in China. The sample includes the pollution-intensive listed enterprises on the Chinese Shanghai Stock Exchange and Shenzhen Stock Exchange from 2011 to 2019. The empirical results suggest that, increasing public environmental awareness significantly reduces production by 0.06 % in enterprises with high consumer pressure, and green innovation in enterprises with high investor pressure increases significantly by 0.12 %. The public achieves this effect through direct and indirect channels. Public attention directly drives corporate behavior due to pressure from consumers and investors. Moreover, public attention promotes environmental policies aimed at state-owned enterprises and indirectly drives corporate behavior. These findings demonstrate the significant role of the public during green process, and highlight the channels to maximize the public impacts for policymakers.