Government procurement and corporate environmental policies
Chen, J., Jing, C., Keasey, K. and Xu, B.
It is advisable to refer to the publisher's version if you intend to cite from this work. See Guidance on citing. Abstract/SummaryWe 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 important role of the government in disciplining corporate environmental misbehavior.
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