IDEAS home Printed from https://ideas.repec.org/a/kap/ecopln/v56y2023i5d10.1007_s10644-021-09344-6.html
   My bibliography  Save this article

Fiscal policy benefits and green recovery of firms: an experimental exploration of Chinese listed firms in post-Covid-19

Author

Listed:
  • Dongyang Zhang

    (Capital University of Economics and Business)

Abstract

In the wake of the COVID-19 pandemic, fiscal policy is an important tool to facilitate green recovery of the economy. This paper uses the low-energy-intensive incentive support policy implemented by the Chinese government as a trial and explores the impact of fiscal policy on the green recovery of firms. Using Chinese listed-firm data from 2019Q1 to 2021Q1, we use the difference-in-differences method to estimate policy effects, leading to several findings. First, our fundamental results show that the government's low-energy-intensive support policy can significantly improve low-energy-intensive firm performance more than that of high-energy-consuming firms, with respect to return on assets, return on equity and Tobin’s Q. Second, regarding the mechanisms involved, our estimation results indicate that the low-energy-intensive support policy works by alleviating financial constraints to improve firm performance. Third, our empirical findings indicate that low-energy-intensive support policy can increase current ratio, liquidity and cash flow, resulting in improved firm financial resources. Finally, the fiscal support policy reduces management and financial costs, thus improving firm performance. Our findings recommend adoption of well-designed fiscal policies in regions where green economic recovery is needed.

Suggested Citation

  • Dongyang Zhang, 2023. "Fiscal policy benefits and green recovery of firms: an experimental exploration of Chinese listed firms in post-Covid-19," Economic Change and Restructuring, Springer, vol. 56(5), pages 2921-2942, October.
    • Handle: RePEc:kap:ecopln:v:56:y:2023:i:5:d:10.1007_s10644-021-09344-6
    DOI: 10.1007/s10644-021-09344-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10644-021-09344-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10644-021-09344-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Dongyang & Mohsin, Muhammad & Rasheed, Abdul Khaliq & Chang, Youngho & Taghizadeh-Hesary, Farhad, 2021. "Public spending and green economic growth in BRI region: Mediating role of green finance," Energy Policy, Elsevier, vol. 153(C).
    2. Danlu Bu & Chenyu Zhang & Xiaoyan Wang, 2017. "Purposes of government subsidy and firm performance," China Journal of Accounting Studies, Taylor & Francis Journals, vol. 5(1), pages 100-122, January.
    3. Nishimura, Junichi & Okamuro, Hiroyuki, 2011. "Subsidy and networking: The effects of direct and indirect support programs of the cluster policy," Research Policy, Elsevier, vol. 40(5), pages 714-727, June.
    4. Jeffrey D. Sachs & Guido Schmidt-Traub & Mariana Mazzucato & Dirk Messner & Nebojsa Nakicenovic & Johan Rockström, 2019. "Six Transformations to achieve the Sustainable Development Goals," Nature Sustainability, Nature, vol. 2(9), pages 805-814, September.
    5. Onur Bayar & Fariz Huseynov & Sabuhi Sardarli, 2018. "Corporate Governance, Tax Avoidance, and Financial Constraints," Financial Management, Financial Management Association International, vol. 47(3), pages 651-677, September.
    6. Michael Firth & Peter M. Y. Fung & Oliver M. Rui, 2006. "Firm Performance, Governance Structure, and Top Management Turnover in a Transitional Economy," Journal of Management Studies, Wiley Blackwell, vol. 43(6), pages 1289-1330, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boqiang Lin & Chongchong Xu, 2024. "RETRACTED ARTICLE: Evaluating the effect of green fiscal policy on firm energy performance: evidence from China," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-29, April.
    2. Chen, Fujiang & She, Wuyue & Zeng, Feng & Gao, Meiben & Wen, Chao & Liu, Guoxin & Wu, Lixun & Wu, Yang & Zhang, Chi, 2024. "Resource depletion and conservation: Balancing demands on resources for green recovery and sustainability," Resources Policy, Elsevier, vol. 89(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahmed, Khalid & Khan, Bareerah, 2024. "China's post-pandemic energy rebound and climate targets under the current regulations and green innovation capacity," Energy, Elsevier, vol. 302(C).
    2. Fang Shuai, 2019. "Homophily Exclusion or Homophily Preference? The Influence of the Executive Identity of Nonexecutive Directors on the Focal Firm Executive Pay and Ordinary Employee Pay," Journal of Systems Science and Information, De Gruyter, vol. 7(6), pages 550-567, December.
    3. Qadri, Hussain Mohi ud Din & Ali, Hassnian & Abideen, Zain ul & Jafar, Ahmad, 2024. "Mapping the Evolution of Green Finance Research and Development in Emerging Green Economies," Resources Policy, Elsevier, vol. 91(C).
    4. Wided Bouaine & Lanouar Charfeddine & Mohamed Arouri & Frédéric Teulon, 2014. "The influence of CEO departure type and board characteristics on firm performance," Working Papers 2014-87, Department of Research, Ipag Business School.
    5. Chi Zhang & Zhongchang Sun & Qiang Xing & Jialong Sun & Tianyu Xia & Hao Yu, 2021. "Localizing Indicators of SDG11 for an Integrated Assessment of Urban Sustainability—A Case Study of Hainan Province," Sustainability, MDPI, vol. 13(19), pages 1-14, October.
    6. Tao, Miaomiao, 2024. "Dynamics between electric vehicle uptake and green development: Understanding the role of local government competition," Transport Policy, Elsevier, vol. 146(C), pages 227-240.
    7. Sonika Redhu & Pragati Jain, 2024. "Unveiling the nexus between water scarcity and socioeconomic development in the water-scarce countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 19557-19577, August.
    8. Ben Slimane, Faten & Padilla Angulo, Laura, 2019. "Strategic change and corporate governance: Evidence from the stock exchange industry," Journal of Business Research, Elsevier, vol. 103(C), pages 206-218.
    9. Cheng, Louis T.W. & Leung, T.Y., 2016. "Government protection, political connection and management turnover in China," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 160-176.
    10. Riccardo Crescenzi & Guido de Blasio & Mara Giua, 2020. "Cohesion Policy incentives for collaborative industrial research: evaluation of a Smart Specialisation forerunner programme," Regional Studies, Taylor & Francis Journals, vol. 54(10), pages 1341-1353, October.
    11. Keeheon Lee, 2021. "A Systematic Review on Social Sustainability of Artificial Intelligence in Product Design," Sustainability, MDPI, vol. 13(5), pages 1-29, March.
    12. Ida Kubiszewski & Kenneth Mulder & Diane Jarvis & Robert Costanza, 2022. "Toward better measurement of sustainable development and wellbeing: A small number of SDG indicators reliably predict life satisfaction," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(1), pages 139-148, February.
    13. Zhao, Yang & Yongquan, Yang & Jian, Ma & Lu, Angela & Xuanhua, Xu, 2024. "Policy-induced cooperative knowledge network, university-industry collaboration and firm innovation: Evidence from the Greater Bay Area," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    14. Ma, Cong & Cheok, Mui Yee & Chok, Nyen Vui, 2023. "Economic recovery through multisector management resources in small and medium businesses in China," Resources Policy, Elsevier, vol. 80(C).
    15. Yao, Shouyu & Pan, Yuying & Sensoy, Ahmet & Uddin, Gazi Salah & Cheng, Feiyang, 2021. "Green credit policy and firm performance: What we learn from China," Energy Economics, Elsevier, vol. 101(C).
    16. Gul, Ferdinand A. & Cheng, Louis T.W. & Leung, T.Y., 2011. "Perks and the informativeness of stock prices in the Chinese market," Journal of Corporate Finance, Elsevier, vol. 17(5), pages 1410-1429.
    17. Martin J. Conyon & Lerong He, 2016. "Executive Compensation and Corporate Fraud in China," Journal of Business Ethics, Springer, vol. 134(4), pages 669-691, April.
    18. Oliver Reader, M. & Eppinga, Maarten B. & de Boer, Hugo J. & Petchey, Owen L. & Santos, Maria J., 2024. "Consistent ecosystem service bundles emerge across global mountain, island and delta systems," Ecosystem Services, Elsevier, vol. 66(C).
    19. Björnemalm, Rickard & Sandström, Christian & Åkesson, Nelly, 2023. "A Public Choice Perspective on Mission-Oriented Innovation Policies and the Behavior of Government Agencies," Ratio Working Papers 366, The Ratio Institute.
    20. Puertas, Rosa & Guaita-Martinez, José M. & Marti, Luisa, 2023. "Analysis of the impact of university policies on society's environmental perception," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:ecopln:v:56:y:2023:i:5:d:10.1007_s10644-021-09344-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.