Can regulatory minority shareholders reduce corporate carbon emissions? Evidence from a quasi-natural experiment in China

Can regulator-sponsored minority shareholders affect corporate carbon emissions? In this study, we investigate the impact of the China Securities Investor Services Center (CSISC), a novel minority shareholder protection mechanism, on corporate carbon emissions. Employing a difference-in-differences design, we find that CSISC shareholding significantly reduces carbon emissions by mitigating tunnelling activities and enhancing the quality of environmental information disclosure. We also find that this effect is more pronounced among firms with weaker internal governance and external monitoring. Our findings have important implications for strengthening minority shareholder protection and constraining carbon emissions in emerging markets.