The Influence of Urbanization and Environmental Factors on the Financial Performance of Retail and Automotive Industries in China

Abstract

This study probes the intersection of urbanization, environmental degradation, and corporate performance in China’s retail and automotive sectors. Utilizing data from 23 regions spanning 2000–2022, the research elucidates the impacts of urban growth, infrastructure development, and particulate matter 2.5 pollution (PM2.5) on these industries. The study uses panel data from 2000 to 2022 and the corresponding analytical random effect model, along with pre- and post-estimation tests for the main results. The findings reveal that while urban population growth bolsters retail sales, it adversely affects the automotive industry. Urban infrastructure does not influence conventional sectors, yet it negatively impacts online retail sales. PM2.5 pollution depresses retail and automotive sales but boosts online sales, underscoring the rising environmental consciousness among consumers. The urban population significantly moderates the relationship between PM2.5 pollution and sales across sectors, hinting at unique consumption patterns in populated urban areas. This study provides critical insights for policymakers aiming for sustainable economic growth, and encourages further research with more region-specific factors and extended time frames.