Journal of Financial and Quantitative Analysis Vol. 61 No. 3 2026

Government Procurement and Corporate Environmental Policies

Jie Chen¹; Chenxing Jing²; Kevin Keasey¹; Bin Xu³

¹ University of Leeds · ² University of International Business and Economics · ³ University of Reading

Abstract

We investigate how the government, as a customer, affects a supplier’s environmental policies. We find that government contractors have significantly lower levels of toxic pollution. Exploring the mechanisms, we show that government contractors reduce pollution by strengthening internal environmental governance and increasing investments in pollution abatement. Further analysis rules out alternative explanations related to reduced economic activities and financial constraints. Overall, our results highlight the government’s important role in disciplining corporate environmental misbehavior.

DOI

10.1017/s0022109025102111

Volume

61

Issue

3

Pages

1178-1215

Language

en

Sources

openalex crossref

Cite

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