-specific costs of capital. We show that SOEs did respond to the performance evaluation reform by altering their investment decisions … evidence that incentive schemes affect real investment and sheds new light on challenges faced by economic reforms in China …

Government subsidies are often used to stimulate environment-friendly investment. We find that Chinese firms reduce … green investment as the uncertainty of subsidies rises. This effect is identified from weather-driven fluctuations in air … engage in less green R&D investment, patent applications, and research staff. Industries that are heavy emitters and those …