The impact of governmental initiatives on corporate environmental responsibility: the case of the Belt and Road Initiative

The Belt and Road Initiative (BRI) is the most comprehensive and substantial international cooperation platform, creating a new market influenced by economic and political factors. In this paper, the authors aim to examine whether and how the BRI impacts the Chinese enterprises' corporate environmental responsibility (CER).

Based on China's listed firms' database from 2011 to 2018, the authors use the PSM-DID method, an econometrics method combined with propensity score matching (PSM) and difference-in-differences (DID), to conduct causal inference between the BRI and Chinese enterprises' CER and conduct a series of robustness analyses. Moreover, the authors explore the mechanisms underlying the main effect from both market and non-market perspectives.

The results suggest that the BRI significantly increases Chinese enterprises' CER. Further analyses show that market competition and government support are two possible mechanisms through which the BRI has an effect on the enterprises' CER.

The research study supplements existing work on the environmental effects of the BRI at a microlevel and adds to the literature on the drivers of CER. The findings offer valuable insights into governments and scholars by demonstrating that CER is a crucial tool for Chinese enterprises to gain a competitive advantage in the increasingly competitive markets along the BRI.