Work

Environmental Regulation, regional finance development and enterprises' cross-regional capital flow

Year: 2025

Type: article

Abstract: This paper analyzes both theoretically and practically the effects of environmental regulation on cross-regional capital flows. Specifically, this paper selects the New Environmental Protection Law as a natural experiment to examine the causal relationship between environmental regulation and enterprises' cross-regional capital flows spanning 2011 to 2022. The findings indicate that introducing the new Environmental Protection Law can inhibit enterprises' cross-regional capital flow by reducing regional finance development. Further analysis indicates that firms' nature and regional legal environment have heterogeneous effects. Specifically, state-owned enterprises are insensitive to environmental regulation, while non-state-owner enterprises have opposite ones due to severe supervision. An excellent legal environment plays a vital role in inhibiting effects.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2025.103984

Authors: Hong Yu, Qi Lyu, Yi Jiang

Institutions: Wuhan University, Central China Normal University, Jiangxi University of Finance and Economics

Language: English

Topic: Energy, Environment, Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $1,930