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Environmental regulations and charitable donations made by polluting companies: Evidence from China

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  • Zhang, Kaixia
  • Li, Weibing

Abstract

Using a quasi-natural experiment on the adjustment of sulfur dioxide emission levy standards by provinces in China from 2007 to 2014, we apply a difference-in-differences method to examine how stricter environmental regulations affect charitable donations made by polluting companies. Empirical results show that the increase in pollution levy standards increases corporate donations by 0.505%, implying that polluting companies use charitable donations as a strategic action to address the negative impact of environmental penalties. We also find that the political connection, local environmental governance preference, public image and corporate social responsibility strategies significantly affect the relationship between environmental regulations and donations of polluters.

Suggested Citation

  • Zhang, Kaixia & Li, Weibing, 2024. "Environmental regulations and charitable donations made by polluting companies: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1248-1267.
    • Handle: RePEc:eee:reveco:v:93:y:2024:i:pa:p:1248-1267
    DOI: 10.1016/j.iref.2024.03.055
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    More about this item

    Keywords

    Charitable donations; Polluting companies; Pollution levy standards; Environmental regulations;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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