Does air pollution affect corporate shareholder responsibility performance? Analysis of regression discontinuity design based on the "Qinling-Huaihe" line

Based on the spillover effects of pollution and shareholder value theory, this paper constructs a regression discontinuity model using panel data from Chinese manufacturing companies for the period 2015–2020. Using the 'Qinling-Huaihe' line as an instrumental variable, we employ a two-stage least squares approach to estimate the impact mechanism of air pollution on Corporate Shareholder Responsibility Performance (CSRP). The baseline regression results indicate that air pollution significantly inhibits CSRP. Furthermore, we have tested the robustness of these results through sensitivity tests, including bandwidth selection and polynomial-order selection for the assignment variable, adjustments to the time window, the inclusion of omitted variables, the removal of off-site relocated firms, and the replacement of independent and instrumental variables. Additionally, we have found that the relationship between air pollution and CSRP varies among different environmental attributes and regional characteristic subgroups. Mechanistic analyses indicate that the relationship between air pollution and CSRP is positively moderated by environmental regulation and CEO duality. However, economic policy uncertainty does not exert a moderating effect. Additionally, air pollution inhibits CSRP by reducing corporate cash holdings, causing brain drain, and decreasing investment in R&D. Therefore, the control of air pollution is imperative. Environmental governance can be strengthened by broadening financing channels and creating stable institutional environments, thereby enhancing CSRP. Our findings carry significant implications for the development of government macro-policies and corporate environmental decisions.