Do anti-corruption campaigns affect corporate environmental responsibility? Evidence from China

Abstract

This paper examines the anti-corruption campaign in China as an exogenous shock using data on Chinese energy firms from 2010 to 2016. It conducts a quasi-natural experiment using a difference-in-differences model to examine the effect of anti-corruption policies on corporate environmental responsibility. Our findings show that the anti-corruption campaign makes energy firms improve their corporate environmental responsibility. The greater the degree of marketization in the province where the firm is headquartered, the larger the campaign's impact on corporate environmental responsibility. Furthermore, anti-corruption policies have a greater impact on firms with more financial resources and higher analyst coverage. The paper provides the regulator with several policy recommendations for improving corporate environmental responsibility.