Randomized trial reveals that controlling shareholders’ pledging negatively affects green investment in manufacturing firms, suggesting implications for sustainability.
Key Points
This study examines how controlling shareholders’ share pledging influences corporate green investment in Chinese manufacturing firms.
Investigated data from Chinese A-share manufacturing firms from 2012 to 2024.
Conducted mechanism analysis to identify the effects on risk-taking incentives and financing constraints.
Performed heterogeneity tests based on industry pollution levels and regional financial development.
Higher share pledging correlates with reduced green investment, especially in less polluting sectors.
The negative effect is more pronounced in regions with advanced financial systems.
The 2018 Environmental Protection Tax Law implementation weakened the adverse impact of share pledging on green investment.