Foreign shareholding and corporate environmental expenditure: Evidence from China

Abstract

This paper estimates the effects of foreign investments on the environmental expenditure of listed companies in China by differentiating pre-IPO foreign investors from post-IPO foreign investors. Our findings indicate that while pre-IPO foreign investments make significant and positive contributions, the influence of post-IPO foreign investments is negligible. These results are particularly pronounced for enterprises that are privately owned, located in coastal China, operating in heavily polluting industries, and whose management lacks prior experience in environmental protection and international vision. Furthermore, research efforts are devoted to uncovering potential channels through which pre-IPO foreign investments affect corporate environmental expenditure, including environmental regulations in home countries or regions, government attention to environmental issues, media coverage, and corporate financial constraints.