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Environmental justice and corporate green transition: a new perspective from environmental courts in China

Author

Listed:
  • Mengyu Li

    (Beijing Technology and Business University)

  • Qian Zheng

    (Beijing Technology and Business University)

  • Zicheng Zhang

    (Tongji University)

  • Yu Zhao

    (Zhongnan University of Economics and Law)

  • Shi Chen

    (Shanghai University of Finance and Economics)

Abstract

Different from administrative law enforcement that yields immediate effects on social governance, environmental justice is often considered to have limited impact on enterprises’ green behavior due to its passive and neutral nature. This paper employs propensity score matching-difference in differences method (PSM-DID) to analysis how environmental justice affects the green total factor productivity (GTFP) of enterprises based on quasi natural experiment of the establishment of environmental courts (ECs) in China. The results confirm that the establishment of ECs promotes enterprise’s GTFP, and this conclusion remains robust to multiple scenarios. Our mechanism tests show that ECs enhance enterprise’s GTFP by boosting green innovation and weakening political connections. In addition, the effect of ECs is prominent with greater public supervision and environmental enforcement intensity. Further inspections exhibit that the positive influence of ECs is more significant in capital-intensive industries, eastern regions, and regions with better legal environments. This paper provides new empirical evidence for revealing the connection between environmental justice and corporate green transition, and presents pertinent policy implications on the advancement of environmental justice and the acceleration of corporate green development.

Suggested Citation

  • Mengyu Li & Qian Zheng & Zicheng Zhang & Yu Zhao & Shi Chen, 2025. "Environmental justice and corporate green transition: a new perspective from environmental courts in China," Economic Change and Restructuring, Springer, vol. 58(1), pages 1-36, February.
    • Handle: RePEc:kap:ecopln:v:58:y:2025:i:1:d:10.1007_s10644-024-09848-x
    DOI: 10.1007/s10644-024-09848-x
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    More about this item

    Keywords

    Environmental justice; Environmental courts; Corporate green transition; GTFP; Quasi-natural experiment;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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