Political corruption and ecological pollution constitute two major impediments to sustainable development, compelling governments globally to adopt targeted policy to mitigate these challenges. Based on institutional theory, this paper explores the policy effect of anti-corruption on corporate environmental misconduct (CEM) and investigates whether political ties serve as a moderating linkage between corruption and environmental degradation. We focus on key stakeholders including governments that design and implement anti-corruption campaigns, listed firms whose environmental behaviors are under scrutiny, and politically connected managers whose ties may alter policy effects. Using data on China’s public listed firms from 2004 to 2017, we employed a regression discontinuity design (RDD) and a Poisson regression model to test our hypotheses, supplemented by the Placebo test and Heckman two-stage test for robustness checks. The empirical results demonstrate that: anti-corruption campaigns significantly reduce CEM, with more intensive campaigns showing stronger effects; political ties differentially moderate the anti-corruption - CEM relationship; Specifically, central ties enhance the CEM-reducing effect of anti-corruption efforts while local ties weaken it. This study extends the body of scholarly research on anti-corruption and CEM while offering insights for policymakers and other stakeholders, including firms engaged in sustainable governance.
Tang et al. (Thu,) studied this question.