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ORIGINAL RESEARCH
The Role of Environmental Regulations
in Shaping Companies' ESG Performance:
Evidence from China's Prevention
and Control of Atmospheric Pollution
1
Faculty of Business, Macao Polytechnic University, R. de Luís Gonzaga Gomes, Macau, China
2
Faculty of Finance, City University of Macau, Avenida Padre Tomás Pereira Taipa, Macau, China
3
Law School, Zhejiang University of Technology, Hangzhou, China
4
Faculty of Humanities and Social Sciences, Macao Polytechnic University, Macau, China
Submission date: 2024-05-29
Final revision date: 2024-07-22
Acceptance date: 2024-08-29
Online publication date: 2024-10-29
Publication date: 2025-11-04
Corresponding author
Longsheng Wu
Faculty of Finance, City University of Macau, Avenida Padre Tomás Pereira Taipa, Macau, China
Faculty of Finance, City University of Macau, Avenida Padre Tomás Pereira Taipa, Macau, China
Pol. J. Environ. Stud. 2025;34(6):6559-6573
KEYWORDS
Prevention and Control of Atmospheric PollutionESG performanceDifference-in-DifferencesState-owned EnterprisesHighly Polluting Enterprises
TOPICS
ABSTRACT
This study investigates the impact of environmental regulatory policies on corporate Environmental,
Social, and Governance (ESG) performance, utilizing China's atmospheric pollution prevention and
control policies as a quasi-experiment. Employing a difference-in-differences model and utilizing data
from Chinese A-share listed companies in Shanghai and Shenzhen spanning from 2009 to 2022, the
study empirically examines the relationship between atmospheric pollution prevention and control
policies and corporate ESG performance. The results reveal a significant positive association between
atmospheric pollution prevention and control policies and the ESG performance of listed companies,
a relationship that withstands various robustness tests. Furthermore, heterogeneity analysis indicates
that the impact of atmospheric pollution prevention policies is more pronounced among state-owned
enterprises and highly polluting enterprises. These findings underscore the critical role of environmental
regulations in driving corporate sustainability practices and have implications for policymakers and
practitioners seeking to promote sustainable development initiatives.
CONFLICT OF INTEREST
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
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