摘要:We examine the influence of political connections on firms' environmental performance within the setting of China's Regulation 18, which prohibits government officials from taking business positions. Firms that lost political connections due to Regulation 18 experienced increases in environmental performance. This improvement is mainly driven by the tunneling channel rather than the sheltering channel. Specifically, we decompose the environmental ratings into strengths and concerns, and find the effect is stronger on strengths. The environmental improvements are more pronounced for firms with a higher degree of tunneling, and are value-enhancing. Our findings suggest that political connections impede firms' environmental performance and generate negative externality to the environment.

关键词:Environmental performance，Political connection，Regulation 18，Tunneling，Sheltering

该文2022年5月在线发表于《Journal of Corporate Finance》，该期刊为999策略白菜手机论坛学术期刊分级方案B+奖励期刊。

论文链接:https://www.sciencedirect.com/science/article/pii/S0929119922000578