Regulatory distance and corporate environmental performance: From the perspective of rent-seeking distance.

ABSTRACT

This paper investigates the impact of regulatory distance on corporate environmental performance using data from Chinese A-share listed companies. The results demonstrate that staying away from regulatory agencies significantly improves corporate environmental performance. The potential impact mechanism is that the increase in regulatory distance significantly suppresses rent-seeking activities. The above impacts are particularly pronounced in companies with weak CEO political and financial connections, state-owned enterprises, and firms in regions with low levels of marketization, owing to the fact that these company characteristics influence firms' ability or inclination to participate in rent-seeking. Further evidence indicates that the effect of regulatory distance on environmental performance will be significantly enhanced by strengthening media regulation and anti-corruption efforts.