Does environmental investment improve corporate productivity? Evidence from Chinese listed firms

This paper analyses the impact mechanisms of environmental investment on the productivity of listed firms in China. The empirical results show that, first of all, environmental investment has a significant negative impact on the productivity of listed firms, which confirms that listed firms have a typical compliance cost effect. Moreover, listed enterprises with low productivity and high productivity are less negatively affected by environmental investment than are listed enterprises with moderate productivity. Secondly, the first-order lag term of environmental investment has a significant inhibitory effect on the productivity of listed companies in the eastern region, but has no significant impact on the productivity of listed companies in the central and western regions. Finally, the increase in environmental investment has a great influence on the productivity of listed firms in heavily polluting industries, but it has no obvious influence on non-heavily polluting industries.