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Does air pollution change the business strategy for investment? The strategic influence of national governance

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  • Zhou, Bingjun
  • Gao, Ke
  • Ning, Jing
  • Zhang, Anqi
  • Dai, Jiapeng

Abstract

This research aims to investigate the connection between pollution secretions and corporate investment, with a particular focus on how national governance moderates this relationship. Utilizing a ten-year dataset (2010–2019) from publicly listed enterprises in BRICS countries, the study finds that air pollution negatively affects corporate investment by increasing operational risks and regulatory uncertainties. However, national governance significantly moderates this adverse impact. The analysis suggests that policy officials should prioritize effective governance, highlighting its dual benefits in promoting environmental sustainability and fostering investment growth. Corporate managers are urged to recognize the importance of considering air pollution and national governance when making investment decisions.

Suggested Citation

  • Zhou, Bingjun & Gao, Ke & Ning, Jing & Zhang, Anqi & Dai, Jiapeng, 2024. "Does air pollution change the business strategy for investment? The strategic influence of national governance," Finance Research Letters, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324003325
    DOI: 10.1016/j.frl.2024.105302
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    More about this item

    Keywords

    Air pollution; Environment stress theory; Corporate investment; Institutional theory; National governance;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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