Corporate political acuity and carbon - efficiency synergies

Abstract

Research question: In the context of global low-carbon emission reduction, how to achieve green and high-quality development has become a major issue for the Communist Party of China (CPC) and the Chinese government recently. Based on the data of China's listed companies from 2013 to 2020, this paper uses Python to implement text analysis of annual reports, and explores the relationship between political acuity and carbon-efficiency synergies (CES) from the perspective of enterprise initiative.

Research findings: We found that (1) political acuity positively affects carbon-efficiency synergies. (2) Increased political acuity can reduce carbon emissions, but the effect on economic efficiency is not obvious. That is, low carbon takes the lead in raising the level of carbon-efficiency synergies. (3) Environmental regulations can positively regulate the relationship between political acuity and carbon-efficiency synergies. (4) Political acuity in southern China, carbon neutral and non-state-owned enterprises (NSOEs) will have a more pronounced effect on carbon-efficiency synergies.

Academic implications: From the perspective of the root causes of political linkages, we find the synergies between formal and informal institutions, and the key factors for policy implementation.

Policy implications: This paper is helpful for enterprises to improve the synergies of emission reduction and efficiency promotion, and has practical implications for the government to promote green and high-quality development.

Keywords: Carbon reduction; Carbon-efficiency synergies; Efficiency improvement; Environmental regulation; Political acuity.