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Governmental subsidies, corporate environmental investments and firm performance: Evidence based on oil & petroleum industry

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  • Xue, Dawei
  • Feng, Jiayin
  • zhu, Zhihong

Abstract

This paper examines the impact of different types of government subsidies on the financial performance of oil & petroleum corporations. We find that environment-friendly government subsidies enhance the investments in environmental protection of oil & petroleum corporations, comparing with non-environment-friendly subsidies. Furthermore, preventive investments in environmental protection significantly mediate the effect of corporate subsidies on financial performance, whereas government investments in environmental protection have a masking effect. Overall, we provide policy implications for government support to balance the development of firms and environmental protection.

Suggested Citation

  • Xue, Dawei & Feng, Jiayin & zhu, Zhihong, 2023. "Governmental subsidies, corporate environmental investments and firm performance: Evidence based on oil & petroleum industry," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323003914
    DOI: 10.1016/j.frl.2023.104019
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    References listed on IDEAS

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