Institutional investors and corporate carbon emissions: evidence from China

Purpose This study aims to investigate the roles of institutional investors in corporate carbon emissions. Specifically, this study focuses on the influence of institutional investors' financing and monitoring roles on corporate carbon emissions. Design/methodology/approach Using data on Chinese A-share listed companies and carbon emissions data sourced from the Institute of Public and Environment Affairs, this study adopts a fixed effects regression model and uses STATA software to empirically examine how institutional investors affect corporate carbon emissions. Findings The results suggest that institutional investors play an important role in reducing corporate carbon emissions. Moreover, the negative impact of institutional investors on corporate carbon emissions is partly driven by their financing and governance roles. Compared with trading institutional investors, stable institutional investors have a more significant inhibitory effect on corporate carbon emissions. Originality/value This study provides new insights into the effects of institutional investors on corporate carbon emissions by focussing on their financing and governance roles. This study also enriches the literature on the effects of institutional investors on corporate behaviour by identifying the heterogeneous effects of different types of institutional investors on corporate carbon emissions.