Environmental justice and corporate green transition: a new perspective from environmental courts in China

Different from administrative law enforcement that yields immediate effects on social governance, environmental justice is often considered to have limited impact on enterprises' green behavior due to its passive and neutral nature. This paper employs propensity score matching-difference in differences method (PSM-DID) to analysis how environmental justice affects the green total factor productivity (GTFP) of enterprises based on quasi natural experiment of the establishment of environmental courts (ECs) in China. The results confirm that the establishment of ECs promotes enterprise's GTFP, and this conclusion remains robust to multiple scenarios. Our mechanism tests show that ECs enhance enterprise's GTFP by boosting green innovation and weakening political connections. In addition, the effect of ECs is prominent with greater public supervision and environmental enforcement intensity. Further inspections exhibit that the positive influence of ECs is more significant in capital-intensive industries, eastern regions, and regions with better legal environments. This paper provides new empirical evidence for revealing the connection between environmental justice and corporate green transition, and presents pertinent policy implications on the advancement of environmental justice and the acceleration of corporate green development.