Religion and enterprise pollution behavior: Evidence from China

Abstract

In recent years, China's environmental pollution problem has received widespread public attention. Although religion has a long and influential history in China, little is known about whether religion influences Chinese firms' environmental pollution behavior. Based on the geographic location data of more than 40,000 religious sites of Buddhism and Taoism in China, data from Chinese industrial enterprises, and pollution emissions data from 1998 to 2013, this study empirically analyzes the regulatory effect of religion on enterprises' pollution behavior. First, religion can have a suppressive effect on Chinese enterprises' pollutant emissions behavior, particularly private-owned enterprises, and promotes enterprises' green innovation. Second, heterogeneity analyses reveal that the environmental constraints of religion on enterprises are more evident in small and medium-sized enterprises, pollution-intensive enterprises, labor-intensive enterprises, and capital-intensive enterprises. Third, when formal institutions are absent or ineffective, religion can be a substitutive mechanism for formal institutions. These findings can be helpful for policymakers in assessing and adjusting existing environmental and religious policies.