Corporate environmental governance scheme and investment efficiency over the course of COVID-19

• DOI: 10.1016/j.frl.2022.102726
• Publication Date: 2022-02-14T17:21:17Z
• Authors: Haiyue Liu; Jie Jiang; Rui Xue; Xiaofan Meng; Shiyang Hu
• Keywords: 13. Climate action; 0502 economics and business; 05 social sciences; Article; 3. Good health

Taking the COVID-19 outbreak as the exogenous shock, we use quarterly reports of Chinese listed firms to examine whether enhanced environmental governance scheme improves corporate investment efficiency over the course of COVID-19. The results show that after the outbreak, firms with greater environmental governance scheme experience more efficient investments, with this effect being more pronounced in non-state-owned enterprises, firms unlisted as key pollution-monitoring units, and firms with higher financial constraints. The results are robust to a battery of robustness checks. These findings provide new evidence on the importance of environmental governance in reaping economic benefits and resilience during crisis times.