The Effects of Environmental Regulation on Corporate Performance: A Chinese Perspective
42 Pages Posted: 30 Aug 2012
Date Written: August 29, 2012
Abstract
This paper presents empirical evidence on the effects of environmental regulation announcements on corporate performance in China when performance is proxied by stock returns. While some results indicate the effectiveness of environmental regulation, others point to the opposite. The perverse results are explained in terms of the lack of enforcement of environmental regulation, which is attributed to legislative shortcomings, poorly designed policy instruments, an unsupportive work environment for environmental regulators, a pro-growth political and social environment, and a cultural predisposition to harmony and consensus-building among those involved in the process.
Keywords: Environmental Regulation, Event Study, Abnormal Returns, Systematic Risk
JEL Classification: G1, G11, H56
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