GRIPS 政策研究センター Policy Research Center


Jul 3, 2012 Report No:12-05

Environmental Compliance and Human Capital: Evidence from Chinese Industrial Firms

Field Economics
Language English

By using a unique cross-sectional dataset of Chinese industrial firms, this paper investigates the external and internal effects of human capital on firms’ environmental performance. The result shows that firms have better environmental compliance because they are ‘pushed’ into making compliance decision by internal driver of human capital and ‘pulled’ to be environmental friendly by external force of social human capital stock. This finding is robust when we take into account of possible endogeneity of human capital. In addition, evidence from this study suggests that the situation of weak implementation of environmental supervision and evasion of environmental monitoring could be reconciled by internal and external effects of human capital.

Keywords Environmental compliance; Human capital; External and internal effects; Endogeneity
attachment 12-05.pdf