Does employee whistleblowing inhibit corporate pollutant emission

Abstract

This paper examines whether and how internal whistleblowing enhances corporate pollution control. We find that setting up an internal whistleblowing system help to reduce the firms' SO2 emission intensity. Our findings are robust after implementing a series of endogeneity test. Further, we show that the impacts of internal whistleblowing on corporate pollution emission are more pronounced in firms facing stronger environmental monitoring, firms contribute more to the local economy, state-owned enterprises, firms with lower litigation risk, and firm with more information disclosed. Finally, we find that internal whistleblowing helps to promote the effectiveness of internal control and improve the corporate social responsibility to inhibit enterprise pollution. This paper is the first to explore how employee monitoring reduce firm pollutant emission, contributing to the growing literature on firm environmental behavior.