Can administrative monopoly regulation enhance corporate ESG performance? Evidence from the fair competition review system

ABSTRACT

Taking the promulgation of the ‘Fair Competition Review System (FCRS)’ in 2016 as a quasi-natural experiment, we employed a generalized Difference-in-Differences model and the listed company data between 2009 and 2021 to investigate the impact of administrative monopoly regulation (AMR) on corporate ESG performance. We find that AMR can enhance corporate ESG performance by building a fairer competition environment, standardizing corporate competition behaviour and promoting corporate sustainable development. Additionally, AMR has a greater promoting effect on the ESG performance of non-zombie enterprises, non-state-owned enterprises, and high-tech enterprises.

KEYWORDS:

• Administrative Monopoly Regulation (AMR)
• ESG
• competition environment
• competition behaviour
• sustainable development

JEL CLASSIFICATION:

• G38
• M14

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Please refer to Appendix A for a detailed introduction to administrative monopolies (Appendix A1) and AMR (Appendix A2) in China.

² Please refer to Appendix B for robustness checks (B1) and heterogeneity analysis (B2).

Additional information

Funding

This work was supported by the [Ministry of education of Humanities and Social Science project] under Grant number [23YJCZH110] (Xing Li); [Chongqing Social Science Planning Major Project for the Construction of the Chengdu-Chongqing Economic Circle] under Grant number [2023ZDSC07] (Gang Yang).