Political promotion events and energy conservation decisions: Evidence from China

• DOI: 10.1016/j.eneco.2021.105135
• Publication Date: 2021-01-27T14:36:42Z
• Authors: Gaowen Kong; Mianmian Ji; Yuemei Guo
• Keywords: 0502 economics and business; 05 social sciences; 7. Clean energy

Abstract Considering political promotion events in China, we investigate how politicians affect the energy conservation and emission reduction (ECER) behaviors of local firms. We find that political promotion significantly increases ECER and that this effect is particularly pronounced for firms with political connections and firms facing high financial constraints. We also explore a possible mechanism underlying this relationship: firms engaging in ECER for political reasons may be rewarded with additional government subsidies. Overall, this study sheds light on the determinants of firms' ECER from the perspective of the career concerns of local politicians and the economic consequences of ECER.