The Moderating Role of Economic Policy Uncertainty in the Relationship between State Ownership and Environmental Performance

With increasing global attention to corporate environmental performance, this study examines whether state ownership contributes to variations in firms' environmental outcomes.It further investigates whether economic policy uncertainty (EPU) moderates the relationship between state ownership and environmental performance.Using panel data from Chinese listed firms during 2018-2022, this study employs a fixed-effects (FE) model for the main analysis, with alternative dependent variables and feasible generalized least squares (FGLS) regressions for robustness tests.The empirical results reveal that state ownership is negatively associated with environmental performance, and that higher levels of EPU intensify this negative relationship.By integrating stakeholder theory and real options theory, this study provides new empirical evidence on how external policy uncertainty influences environmental behavior across ownership structures.It is the first to incorporate EPU into the analysis of environmental strategies of state-owned enterprises, demonstrating that EPU amplifies the strategic delay effect of state-owned enterprises (SOEs) and exacerbates their environmental performance disadvantages.These findings uncover the compounded effects of policy uncertainty and state ownership on environmental outcomes during the COVID-19 pandemic, offering valuable insights for achieving green recovery in the post-pandemic era.