TY - JOUR
T1 - Minimum Wages, State Ownership, and Corporate Environmental Policies
AU - Chen, Tao
AU - Xiong, Xi
AU - Zou, Kunru
N1 - This research was supported by the Singapore Ministry of Education Academic Research Fund (RG166/18) and the SSHR2025 seed grant to Chen, the Key Program of the National Natural Science Foundation of China (No. 72332003) to Xiong, and the Young Scientists Fund of the National Natural Science Foundation of China (Project no. 72302228) to Zou. To our knowledge, there is no financial or other conflict of interest relevant to the subject of this article.
Publisher copyright:
© The Author(s), 2025. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington
PY - 2025/9
Y1 - 2025/9
N2 - Exploring the minimum wage policy discontinuities at county borders, we find that minimum wage hikes induce industrial firms to pollute more and reduce their abatement efforts. State ownership mitigates these negative effects, suggesting its role in addressing externality. The adverse environmental impacts are attenuated by the staggered increase in pollution discharge fees across provinces. These effects are stronger for firms with higher minimum wage sensitivity, lower market power, and greater financial constraints, and for firms that are the subsidiaries of non-listed companies. Overall, our findings highlight the unintended environmental consequences of labor market policies.
AB - Exploring the minimum wage policy discontinuities at county borders, we find that minimum wage hikes induce industrial firms to pollute more and reduce their abatement efforts. State ownership mitigates these negative effects, suggesting its role in addressing externality. The adverse environmental impacts are attenuated by the staggered increase in pollution discharge fees across provinces. These effects are stronger for firms with higher minimum wage sensitivity, lower market power, and greater financial constraints, and for firms that are the subsidiaries of non-listed companies. Overall, our findings highlight the unintended environmental consequences of labor market policies.
KW - environmental externality
KW - geographical discontinuity
KW - minimum wages
KW - state ownership
UR - http://www.scopus.com/inward/record.url?scp=105010248966&partnerID=8YFLogxK
U2 - 10.1017/S0022109024000644
DO - 10.1017/S0022109024000644
M3 - Journal article
SN - 0022-1090
VL - 60
SP - 2921
EP - 2951
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
IS - 6
ER -
