Incentivizing environmental investments: The contest-based subsidy allocation mechanism

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

“…Nevertheless, these internal drivers often struggle to genuinely address the cost compensation and capital dilemma encountered by firms when increasing environmental protection investments. The second dimension concentrates on external factors, comprising various forms of compulsory environmental regulations [14][15][16] and incentive-based environmental regulations [17]. However, during the enforcement of mandatory environmental regulations, not only might there be incomplete execution, data fabrication [18], collusion between the government and enterprises, and other transgressions that undermine the policy's efficacy, but it may also unreasonably exacerbate the production burden on firms, as evidenced by the "constraint hypothesis" and "pollution haven hypothesis".…”