Does ownership matter in driving green subsidies effects? A quasi natural experiment in China

Using the green-performance-evaluation policy boosting green subsidies for heavy polluting enterprises as a quasi-natural experiment, we employ the difference-in-differences (DID) method to confirm the substantial ownership impact on the relation between green subsidies and corporate environmental investment. Our findings indicate that state-owned involved enterprises significantly increase their environmental investment following the receipt of green subsidies, whereas non-state-owned involved enterprises temporarily reduce their environmental investment after receiving green subsidies. Mechanism analysis reveals that these differences stem from the inherent alignment between the objectives of state-owned enterprises and the government.