Better Late than Too Early: Comprehensive Investments and Environmental Compliance

Firms need to allocate their resources comprehensively to comply the environmental regulation as well as maintain economic competitive advantages. Facing a forceful environmental regulation，firms tend to imbalance the economic-environmental targets. Comprehensive utilization of the internal resources can help firms to fulfill the multiple targets even in a situation of relatively insufficient financial support. Furthermore, the resource investment horizon also plays a crucial role in the environmental compliance. Based on the Top-1000 Enterprises Energy-Saving Program launched by the Chinese government, we testify the competency impact of different resource investment strategies on the environmental targets by dividing the firms into two groups: one with faster cumulative energy saving in the earlier period and the other faster in the later period. Empirically, the results show that the fulfillment of energy-saving target needs comprehensive resource investments, which can also help realize an economic-en...