Fiscal Subsidy Distribution and Corporate Environmental Investment: From the Perspective of Organizational Justice Theory

Abstract

Abstract: A fair distribution of fiscal subsidies plays a significant role in promoting the rule of law in finance and motivating firms to participate in environmental governance. From the perspective of organizational justice theory, this paper conducts an empirical analysis of the impact of fiscal subsidy distribution on corporate environmental investment based on the sample data of Chinese A-share listed companies in Shanghai and Shenzhen stock exchanges from 2011 to 2021. The findings suggest that the higher the concentration of local fiscal subsidies, the lower the environmental investment expenditure of enterprises within the jurisdiction; when the concentration of fiscal subsidies is caused by the subsidies that comply with procedural fairness or interactive fairness, the negative impact of fiscal subsidy concentration on corporate environmental investment disappears, indicating that the allocation of fiscal subsidies will affect corporate environmental investment by affecting their perception of fairness. Further research reveals that the the negative impact of concentrated fiscal subsidies on corporate environmental investment is greater when the industry in which the enterprise operates is not heavily polluting, the environmental regulations in the region are weak, and the corporate governance is poor. This indicates that the perception of fairness caused by fiscal subsidy allocation is substitutable with formal systems. Therefore, in the future, China should strengthen the rule of law management of fiscal subsidy allocation and enhance the procedural fairness of the fiscal subsidy allocation process, intensify the disclosure of information on the allocation of fiscal subsidies and enhance the fairness and interaction of fiscal subsidy allocation, and establish a specialized social supervision and feedback platform, fully leveraging the advantages of social supervision.

Key words: government subsidy distribution, concentration of financial subsidies, corporate environmental investment, organizational justice theory, environmental governance

CLC Number:

F812.45

Wang Han-di, Jia Fan-sheng, Tian Bin-bin. Fiscal Subsidy Distribution and Corporate Environmental Investment: From the Perspective of Organizational Justice Theory[J]. Contemporary Finance & Economics, 2025, 0(2): 41-56.

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