From rules to results: How the ecological rule of law drives corporate pollution reduction

Abstract

Robust ecological and environmental legal protections are vital for reducing pollution intensity, which is essential for balancing high-quality economic development and ecological benefits. Using the establishment of environmental courts in China as a quasi-natural experiment, this study examines how the ecological rule of law affects corporate pollution and the underlying mechanism. It employs a multiperiod propensity score matching–difference-in-differences model and analyzes data from Chinese A-share listed companies from 2007 to 2022. Results indicate that environmental courts significantly reduce corporate pollution intensity by encouraging green investor behavior. Heterogeneity analysis shows that this is particularly evident in resource-based cities. This study contributes to the literature on the influence of environmental courts on corporations, offering theoretical insights and empirical evidence for fostering ecological protection alongside economic development.