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The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility

Author

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  • Mengxin Wang

    (Guangzhou Institute of International Finance, Guangzhou University, Guangzhou 510006, China)

  • Gaoke Liao

    (Guangzhou Institute of International Finance, Guangzhou University, Guangzhou 510006, China)

  • Yanling Li

    (School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China)

Abstract

The rapid economic development has severely damaged the ecological environment and affected public health. Firms are the main source of pollution; thus, corporate environmental responsibility (CER) has attracted great attention from the government, shareholders and the public. This study used both the fixed effects model and the system GMM (Generalized Method of Moments) model to examine the relationship between environmental pollution, environmental regulations and CER for 30 provinces in China, over the period 2005 to 2015. This study drew the following results: first, mandatory CER disclosure policy can significantly decrease environmental pollution. Second, an inverted U-shaped relationship exists between environmental regulations and environmental pollution. Third, environmental pollution has a positive impact on CER. Fourth, an inverted U-shaped relationship exists between environmental regulations and CER. Therefore, it is necessary to find a balance between environmental regulations affecting environmental pollution and CER so that they can effectively reduce environmental pollution and increase the enthusiasm of firms to carry out environmental responsibility activities.

Suggested Citation

  • Mengxin Wang & Gaoke Liao & Yanling Li, 2021. "The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility," IJERPH, MDPI, vol. 18(15), pages 1-13, July.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:15:p:8018-:d:603942
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