Insight into the driving force of environmental performance improvement: Environmental regulation or media coverage

Abstract

The 26th UN Climate Change Conference of the Parties (COP26) reached a package of agreements, announcing the start of a new journey in the global response to climate change. China has always been determined to implement its climate goals and has placed environmental issues in a prominent position of national governance. The promulgation of the 14th Five-Year Pla n has put forward further requirements for China's ecological civilization construction. Using the data of listed companies from 2013 to 2017, this article explores the impact mechanism of environmental regulations and media coverage on corporate environmental performance from the perspective of formal and informal institutions. The results demonstrate that command-based environmental regulations have a positive impact on corporate environmental performance, while the impact of market-based environmental regulations is relatively weak. The media coverage has broad and deep effects on corporate environmental practices, regardless of the medium or tone. In addition, it is proven that media coverage and environmental regulations have a partial substitution effect. These findings indicate that the joint efforts of the government, media and enterprises are indispensable. It is necessary to strengthen the implementation of environmental regulations, give full play to the media and enhance the enthusiasm of enterprises to participate in environmental protection. • The link between command-based environmental regulation and corporate environmental performance is linear and positive. • The media coverage has broad and deep effects on corporate environmental practices, regardless of the medium or tone. • Identify the interaction effect between environmental regulation and media coverage.