Does excess capacity strengthen firms' dependence on the polluting path? Evidence from Chinese iron and steel firms
Hongqi Ma,
Guangjun Shen,
Jingxian Zou
Abstract:This paper studies the relationship between firms' excess capacity and their environmental behaviour by matching the environmental data of China's major iron and steel firms with the Chinese Industrial Enterprises database. The findings are as follows. (1) A firm's excess capacity leads to myopic decisions, and firms will pay more attention to short‐run economic benefits at the cost of long‐run environmental benefits, which strengthens their dependence on the polluting path. (2) The dependence is positively co… Show more
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