Network Infrastructure and Corporate Environmental Performance: Empirical Evidence from “Broadband China”

This study examines the effects and mechanisms of network infrastructure construction on corporate environmental performance. We use Broadband China (BC) as an exogenous shock and construct a staggered Difference-in-differences (DID) model using data of Chinese firm’s pollution between 2009 and 2015. We find that the implementation of BC can significantly reduce firms’ pollutant emissions and improve corporate environmental performance. The results are robust to various checks, including the parallel trend tests, elimination of other policies, placebo tests and the consideration of the policy’s time-varying heterogeneous treatment effect. The mechanism test results indicate that the implementation of BC encourages firms to cut down emissions through the channel of strengthening external supervision, improving technological innovation, and optimizing management. The heterogeneous analysis reveals that BC has more significant effects on pollutant emissions of state-owned enterprises (SOEs), firms in regions with low marketization, and firms in regions with strong government intervention.