This paper studies the impact of political dynamics on corporate environmental investments. Employing data collected manually on the turnover of municipal government officials in China as a proxy for political dynamics from 2007 to 2020, we find that these dynamics drive an uptick in corporate green investments, aligning with the principles of resource dependency theory. The influence of political dynamics on green investments becomes more pronounced when companies grapple with external economic and political uncertainties. Additionally, this effect is most pronounced among energy sector companies and non-state-owned enterprises (SOEs). Despite the observed surge in green investment activity due to political dynamics, we reveal a tendency towards over-investment in green initiatives, subsequently diminishing overall firm investment efficiency under current political conditions. This study advances knowledge regarding how political dynamics influence enterprises' sustainability practices and provides valuable insights for businesses navigating the implications of their pursuit of environmentally responsible development.

This paper studies the impact of political dynamics on corporate environmental investments. Employing data collected manually on the turnover of municipal government officials in China as a proxy for political dynamics from 2007 to 2020, we find that these dynamics drive an uptick in corporate green investments, aligning with the principles of resource dependency theory. The influence of political dynamics on green investments becomes more pronounced when companies grapple with external economic and political uncertainties. Additionally, this effect is most pronounced among energy sector companies and non-state-owned enterprises (SOEs). Despite the observed surge in green investment activity due to political dynamics, we reveal a tendency towards over-investment in green initiatives, subsequently diminishing overall firm investment efficiency under current political conditions. This study advances knowledge regarding how political dynamics influence enterprises' sustainability practices and provides valuable insights for businesses navigating the implications of their pursuit of environmentally responsible development.

This study examines the impact of social insurance contributions on corporate environmental investments. Adopting a quasi-natural experimental design based on the implementation of 2011 Social Insurance Law in China, we employ a difference-in-differences model and find that the increase in social insurance contributions prompts firms to increase their environmental investment. This effect is more pronounced for firms that exhibit higher labor intensity, and are located in regions with stricter environmental regulations, as well as those with politically connected CEOs. Our research provides valuable insights into the factors that influence firms’ environmental investment from the perspective of firm-government interaction.

This paper studies how centralizing environmental administration affected air pollution in China. China launched a vertical administration reform in 2016 to empower upper-level Environmental Protection Bureaus to administer lower-level bureaus vertically through personnel control. Exploiting a stacked difference-in-differences strategy and a regression discontinuity design, we find that the verticalization reform significantly reduced air pollution. The effect was stronger in places where air pollution is less likely to be affected by spillovers from other provinces or where local governments paid less attention to environmental protection before the reform. Additionally, we find that the reform significantly increased the intensity of inspection by local agencies and environmental investments by heavily polluting firms.

政府补助是激励绿色技术投资的常用手段。我们利用中国公司的数据发现，有关政府补助能否持续的不确定性，会抑制政策的预期效果。我们的识别基于能影响官方空气质量文本的外生天气变化，因为政府补助的分配依赖于之。我们发现，在由于天气原因导致政府补助波动较大的城市里，公司对绿色技术的投资、专利申请、研发人员都更少，特别是采矿业、制造业、绿色技术产业。本文认为政策稳定性能鼓励长期绿色技术投资，实现生态文明的目标。