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Political connections and corporate carbon emission: New evidence from Chinese industrial firms

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  • Wang, Zongrun
  • Fu, Haiqin
  • Ren, Xiaohang

Abstract

The promotion of green and sustainable development is an important global issue. We investigate the relationship between firm political connections (PCF) and carbon emissions of industrial enterprises (FCE), by employing the dynamic GMM method based on a panel dataset of Chinese industrial firms from 2008 to 2020, and exploring the mechanism involved. The results show that PCF has a promoting effect on FCE. Second, the moderating mechanism analysis demonstrates that the mitigation effect is better in the command-and-control environmental regulation (CCI) than in the market-based environmental regulation (MBI). Third, heterogeneous analysis proves that environmental pollution by state-owned enterprises with political relations (SOEs) is lower, as compared with that by non-state-owned enterprises (NSOEs); in addition, the PCF still retains an obvious function in facilitating the FCE in the Midwest region with a low degree of marketisation. Further analysis shows that PCF has an asymmetric correlation with FCE at different quantiles. This study provides a theoretical basis for using political connections to achieve carbon neutrality goals and carbon peaks, and enriches the theoretical research on the green development of enterprises.

Suggested Citation

  • Wang, Zongrun & Fu, Haiqin & Ren, Xiaohang, 2023. "Political connections and corporate carbon emission: New evidence from Chinese industrial firms," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:tefoso:v:188:y:2023:i:c:s0040162523000112
    DOI: 10.1016/j.techfore.2023.122326
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