Does environmental pollution liability insurance affect corporate green innovation? New evidence from China

Wang, Xiaogang; Xie, Yuantao; Chen, Yu; Zhang, Yue

doi:10.1016/j.envc.2023.100788

Environmental Challenges

2023

DOI: 10.1016/j.envc.2023.100788

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Does environmental pollution liability insurance affect corporate green innovation? New evidence from China

Xiaogang Wang,

Yuantao Xie,

Yu Chen

et al.

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2024

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Cited by 2 publications

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The role of principal-agent in corporate financialization and green innovation

Huang,

2024

Finance Research Letters

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The role of principal-agent in corporate financialization and green innovation

Huang,

2024

Finance Research Letters

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Compulsory environmental pollution liability insurance and corporate risk taking: a difference-in-difference approach

Liu,

Mai,

Chen

2024

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PurposeMany developing countries have encountered frequent pollution accidents during their rapid development, while the previously weak environmental insurance systems could seriously undermine the progress of sustainable development. Some developing countries like China has initiated and strengthened environmental pollution liability insurance, so how effective this system would be in resolving enterprises environmental risks need to be further revealed.Design/methodology/approachThis research identifies the possible consequence that compulsory environmental pollution liability insurance pilot (CEPLIP) policy would bring to the risk-taking capacity of heavy-polluting corporations of China by the Differences-in-Differences (DID) approach.FindingsThe result supports the implementation of CEPLIP policy in increasing corporate risk-taking capacity. Furthermore, the CEPLIP policy can promote the corporate’s risk-taking capacity by reducing financial distress constraints and enhancing trade credit, supporting its dual role of “fallback effect” as well as “external supervision effect” of environmental insurance. As a result of heterogeneity test, the policy is more pronounced in enterprise samples with mature life cycle stage or lower industrial concentration degree. Similarly, it is more significant in enterprise samples owned better environmental management capabilities or greater strategic deviance.Originality/valueThis paper verifies the effectiveness of the CEPLIP policy by strengthening its supervision mechanism and restraining opportunistic behavior tendency and provides implications for alleviating increasing environmental risk pressure and building more sustainable environmental protection management systems.

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Does environmental pollution liability insurance affect corporate green innovation? New evidence from China

Cited by 2 publications

References 19 publications

The role of principal-agent in corporate financialization and green innovation

The role of principal-agent in corporate financialization and green innovation

Compulsory environmental pollution liability insurance and corporate risk taking: a difference-in-difference approach

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