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Investments in environmental preservation: is the government crowding in green enterprises? Evidence from a-listed companies in China

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  • Yali He
  • Suchang Yang
  • Fayyaz Ahmad
  • Ilhan Ozturk
  • Muhammad Umar Draz
  • Abbas Ali Chandio

Abstract

Government investment in environmental protection (Govin) plays a key role in stimulating private green investment (Prinv) to preserve the ecological environment with economic profits. To examine the effect of Govin on Prinv, this study uses data from 2010 to 2020 on green A-listed companies in China and estimates a dynamic panel model by using both the difference generalized method of moments and system generalized method of moments. The results indicate that Govin has a crowding-in effect on Prinv, and this conclusion is confirmed by several robustness tests. Furthermore, we identify revenues as a potential mechanism variable to explain how Govin affects Prinv. In addition, this study finds regional and enterprise ownership differences in the crowding in effect of Chinese Govin. Finally, based on these outcomes, the study suggests that the government should rationally and dynamically adjust the contents of public environmental investment and optimise its structure to effectively promote the development of green, low-carbon, and circular economies.

Suggested Citation

  • Yali He & Suchang Yang & Fayyaz Ahmad & Ilhan Ozturk & Muhammad Umar Draz & Abbas Ali Chandio, 2023. "Investments in environmental preservation: is the government crowding in green enterprises? Evidence from a-listed companies in China," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(2), pages 2106504-210, July.
    • Handle: RePEc:taf:reroxx:v:36:y:2023:i:2:p:2106504
    DOI: 10.1080/1331677X.2022.2106504
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