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Low-carbon city pilot policy and corporate environmental performance: Evidence from a quasi-natural experiment

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  • Li, Shengnan
  • Zheng, Xinya
  • Liao, Jing
  • Niu, Jianbo

Abstract

Leveraging China's low-carbon city pilot policy as a quasi-natural experiment, we employ the staggered difference-in-differences (DID) method to investigate the impact of the low-carbon city pilot policy on corporate environmental performance (CEP). We find that the pilot policy significantly improves CEP. Our mechanism analysis indicates that the pilot policy effectively stimulates green innovation, subsequently leading to enhanced environmental performance. Our results underscore the fact that government-initiated policies can act as external mechanisms to achieve environmental governance goals. Our study offers firm-level theoretical support and empirical evidence for the government to continue expanding the scope of the low-carbon city pilot policy.

Suggested Citation

  • Li, Shengnan & Zheng, Xinya & Liao, Jing & Niu, Jianbo, 2024. "Low-carbon city pilot policy and corporate environmental performance: Evidence from a quasi-natural experiment," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1248-1266.
    • Handle: RePEc:eee:reveco:v:89:y:2024:i:pa:p:1248-1266
    DOI: 10.1016/j.iref.2023.08.007
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    3. Li, Yu & Yaacob, Mohd Hasimi & Xie, Tao, 2024. "Effects of China's low carbon pilot city policy on corporate green innovation: Considering the mediating role of public environmental concern," Finance Research Letters, Elsevier, vol. 65(C).

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