Do firms respond to calls for environmental improvements made by retail investor?  Evidence from pollution appeals on investor platforms in China

Prof. Shubo ZHANG
Assistant Professor
Antai College of Economics and Management, Shanghai Jiaotong University

Date: 18 April 2024 (Thursday)
Time: 10:30 am to 12:00 pm
Venue: E22-G015
Host: Prof. Rubin HAO, Assistant Professor in Accounting


Retail investors have become more vocal in pressuring firms to improve their environmental performance, yet little is known about whether and when firms respond to these pressures. We conduct a field experiment on investor online platforms where we inject investor pressure by posting requests for environmental improvement among firms found in violation of pollution standards in China. We find that retail investor pressure can reduce subsequent violations by 4.2%. Amplifying the publicity of the appeal through social media leads to greatest reduction in subsequent violations, while calling for more disclosure has no incremental effect on violation reduction. We find significant within-firm spillover effect to other establishments and to other pollutant sources. The finding suggests that retail investor pressure can lead to improvements by changing firms’ perception of investor’s demand for environmental performance.



Prof. Shubo ZHANG is an Assistant Professor of Accounting at Shanghai Jiaotong University (SJTU). Prior to joining SJTU, he obtained his PhD degree from the Chinese University of Hong Kong, and his master’s and bachelor’s degrees in accounting from Renmin University. His main research area is Chinese capital market and field experiment.

 All are welcome!