Can listed companies’ poverty reduction investments improve carbon emissions efficiency in poor regions? Evidence from China

Developing countries usually face the twofold challenges of poverty eradication and carbon emissions reduction. How to reduce carbon emissions while achieving poverty eradication has become a headache for governments. In 2020, China announced its victory in poverty eradication. In the battle against poverty, Chinese listed companies have made meaningful contributions by actively investing in poverty reduction projects. However, the impact of their poverty reduction investments on carbon emissions in poor regions is not clear. This study empirically investigates this question using a difference-in-difference model and manually obtains data on poverty reduction investments in 592 counties in China from 2014 to 2017. Results find that Chinese listed companies' poverty reduction investments do help poor counties improve their carbon emissions efficiency, reflecting the possibility of synergy between poverty eradication and emissions reduction in developing countries. According to the mediation test, listed companies' poverty reduction investments improve the carbon emissions efficiency in China's poor counties through increasing green total factor productivity. In addition, results show that the improvement is more pronounced by strengthening government supervision, establishing economic development industries, and investing in counties with high ecological protection requirements and low per capita income.