Does urban civilization improve corporate environmental performance? A quasi-natural experiment from China

The title of "National Civilized City" is the most prestigious recognition of the level of civilization in Chinese cities. This study utilizes the National Civilized City Selection (NCCS) as a quasi-natural experiment and employs a multi-period difference-in-differences model to investigate the impact of urban civilization on corporate environmental performance (CEP) and its mechanisms. The results show that urban civilization positively impacts the environmental performance of local enterprises, particularly by enhancing their environmental management capability and environmental disclosure willingness. The mechanism test reveals that NCCS improves CEP by increasing external pressure (i.e. government regulation and peer competition) and stimulating internal motivation (i.e. entrepreneurial spirit). In addition, the positive impact of NCCS on CEP is more pronounced for younger enterprises, non-state-owned enterprises, heavily polluting industries, and cities with higher administrative levels. Finally, the NCCS also has value-enhancing effects, which can further increase corporate short- and long-term value.