Are State-Owned Enterprises Good Citizens in Environmental Governance? Evidence From the Control of Air Pollution in China

Abstract

As profit-seeking corporations, state-owned enterprises (SOEs) have incentives to maximize profits from economic activities. However, subject to state ownership, SOEs are expected also to be more accountable for public welfare than their private counterparts. This study examines whether SOEs’ relative provincial dominance reinforces government’s demand to reduce air pollution in China, in the context of anticorruption and performance management. The results suggest that greater relative SOE dominance reduces sulfur dioxide emissions, but this effect is significant only in provinces with a low level of corruption case investigations. Performance management has no discernible moderating impact on the effect of SOE relative dominance.