An Economic Analysis of Government Subsidies and Environmental Penalties on Corporate Green Investment Decisions

An Economic Analysis of Government Subsidies and Environmental Penalties on Corporate Green Investment Decisions | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article An Economic Analysis of Government Subsidies and Environmental Penalties on Corporate Green Investment Decisions Yuzhong Zhou, Mingfei Yang This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7814007/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 26 Apr, 2026 Read the published version in Discover Sustainability → Version 1 posted 9 You are reading this latest preprint version Abstract The study empirically analyzes the impact of environmental fines and subsidies on green investments by A-listed manufacturing firms in Shenzhen and Shanghai, China from 2010 to 2020 using regression analysis. It finds that government subsidies significantly enhance corporate green investments while environmental penalties inhibit such investments. It also reveals that government grants can offset the adverse effects of environmental fines on corporate green investment decisions. Additionally, non-state-owned enterprises exhibit higher elasticity to government environmental policies increasing their green investments in response to both subsidies and penalties. Conversely, state-owned enterprises respond negatively to environmental penalties. Optimizing green investments requires balancing subsidies and penalties based on firm ownership. Government Subsidies Environmental Penalties Ownership Corporate Green Investment Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Published Journal Publication published 26 Apr, 2026 Read the published version in Discover Sustainability → Version 1 posted Reviewers agreed at journal 17 Nov, 2025 Reviews received at journal 07 Nov, 2025 Reviewers agreed at journal 07 Nov, 2025 Reviewers agreed at journal 07 Nov, 2025 Reviewers invited by journal 07 Nov, 2025 Editor invited by journal 03 Nov, 2025 Editor assigned by journal 13 Oct, 2025 Submission checks completed at journal 13 Oct, 2025 First submitted to journal 09 Oct, 2025 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7814007","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":546287652,"identity":"c8d3532e-ce29-4bdb-85d5-f501c5706995","order_by":0,"name":"Yuzhong Zhou","email":"","orcid":"","institution":"Shandong Youth University of Political Science","correspondingAuthor":false,"prefix":"","firstName":"Yuzhong","middleName":"","lastName":"Zhou","suffix":""},{"id":546287653,"identity":"ad84a417-0411-4c72-b71a-2e7fdb37e472","order_by":1,"name":"Mingfei 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