Government attention on environmental protection and firms' carbon reduction actions: Evidence from text analysis of manufacturing enterprises.

The government's attention on environmental protection (GAEP) can signal work priorities and resource allocations to firms, promoting them to implement more carbon reduction actions. Based on the data of listed manufacturing firms in China from 2012 to 2021, this paper measures the GAEP and firms' carbon reduction actions through textual analysis, and then examines the relationship between GAEP and firms' carbon reduction actions. We find that the GAEP could improve firms' carbon reduction actions. This study further indicates that the increase in GAEP leads to the better allocation of environmental subsidies, thereby further positively impacting on firms' carbon reduction actions, and we also demonstrate the positive moderating effect of government-firm relationship. In addition, GAEP could be a stronger effect for state-owned enterprises and the firms located in the eastern and central China. [ABSTRACT FROM AUTHOR]