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Does Corporate Financialization Affect Corporate Environmental Responsibility? An Empirical Study of China

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  • Zhenghui Li

    (Guangzhou International Institute of Finance and Guangzhou University, Guangzhou 510006, China)

  • Yan Wang

    (School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China)

  • Yong Tan

    (Department of Accounting, Finance and Economics, Huddersfield Business School, University of Huddersfield, Queensgate, Huddersfield HD1 3DH, UK)

  • Zimei Huang

    (School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China)

Abstract

This paper explores the effects and mechanisms of corporate financialization on corporate environmental responsibility (CER), using panel regression and the panel quantile regression model. The data is from 484 Chinese A-share non-financial listed companies, over the period 2008–2015. Some valuable results were achieved, as follows. Firstly, corporate financialization has a significantly negative impact on CER. We attribute this fact to the hard constraint of shareholder value maximization and the soft constraint of CER by taking an extrinsic analysis. Moreover, this negative impact shows heterogeneity. As the CER level increases, the remarkable restraint taken by the corporate financialization on CER is gradually weakened. This results in the corporation aiming not only at the shareholder value maximization, but also at the social effect, rather than only the former. In addition, the effect of the moderating role played by corporate leverage and ownership concentration in the influence of corporate financialization on the CER is captured in different kinds of corporations, while different performances are shown.

Suggested Citation

  • Zhenghui Li & Yan Wang & Yong Tan & Zimei Huang, 2020. "Does Corporate Financialization Affect Corporate Environmental Responsibility? An Empirical Study of China," Sustainability, MDPI, vol. 12(9), pages 1-19, May.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:9:p:3696-:d:353561
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