The Effects of Government Environmental Subsidies and Corporate Environmental Investments on Carbon Emissions of Chinese Firms

Abstract

This study investigates the effects of environmental investments and environmental subsidies on carbon emissions by Chinese listed firms on Shanghai Stock and Shenzhen Stock Exchanges from 2008 to 2018. Year-firm data from the RESSET database and financial data from CSMAR database including accounting, financial market, and Chinese government subsidization were utilized. To reflect the tangled relationships between carbon emission, environmental subsidies, and environmental investments, we applied simultaneous equation models (SEMs) and finite lag fixed effects models and report following unique empirical results. First, the government