Can Urban Greening Construction Improve the Corporate Preventive Environmental Investment? Evidence from China

Abstract

Preventive environmental investment can enhance corporate environmental pollution management at the source and facilitate green transformation development. As a form of government of green investment behavior, urban greening construction exhibits a “demonstration effect” and “innovation effect” on corporate preventive environmental investment. To investigate this, the present study utilizes Chinese listed company and city-level data from 2011 to 2020 to analyze the influence, mechanism, and heterogeneity of urban greening construction on corporate environmental preventive investment. The findings indicate that urban green construction significantly encourages corporate preventive environmental investments by increasing enterprises’ willingness to participate in environmental regulation and advancing their green technology innovation. Furthermore, the environmental investment impact of urban greening construction exhibits considerable regional and corporate heterogeneity. Specifically, this effect is more pronounced in areas with lower marketability degrees and environmental regulation levels. It plays a more substantial role for state-owned enterprises and enterprises with lower agency costs.

Does Urban Greening Construction Promote Technological Innovation of Enterprises? Evidence from China

“…Although urban greening construction cannot directly aff ect enterprises' production and operation behaviour, as an essential public environmental governance investment of local governments, urban greening construction has a signifi cant "demonstration eff ect" on improving the environmental governance responsibility of enterprises (Jiao et al, 2023). First of all, investment in urban greening refl ects the determination of local governments to participate in environmental governance.…”