Work

Government Procurement and Corporate Environmental Policies

Year: 2025

Type: article

Abstract: We investigate how the government, as a customer, affects a supplier’s environmental policies. We find that government contractors have significantly lower levels of toxic pollution. Exploring the mechanisms, we show that government contractors reduce pollution by strengthening internal environmental governance and increasing investments in pollution abatement. Further analysis rules out alternative explanations related to reduced economic activities and financial constraints. Overall, our results highlight the government’s important role in disciplining corporate environmental misbehavior.

Source: Journal of Financial and Quantitative Analysis

DOI: 10.1017/s0022109025102111

Authors: Jie Chen, Chenxing Jing, Kevin Keasey, Bin Xu

Institutions: University of Leeds, University of International Business and Economics, University of Reading

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,550