Stronger ownership protection can support cleaner production, but its environmental benefits depend on the conditions surrounding firms’ investment choices.
Using China’s 2007 Property Law as a quasi-natural experiment, the authors show that firms more exposed to the reform significantly reduced toxic emissions after the Law. The findings suggest that ownership protection is most likely to support environmental upgrading when firms face stronger external monitoring and when improved credit access makes green innovation and abatement upgrading financially feasible.
Authors and affiliations:
● Lihan Chen (Shanghai University of Finance and Economics)
● Shaojie Lai (Jiangxi University of Finance and Economics)
● Xiaoling Pu (Kent State University)
● Qing Sophie Wang (University of Canterbury)
