Spatial characteristic of environmental protection businesses: a study of A-Share Listed Environmental Companies in China

China’s cross-border pollution problem has attracted a growing level of attention from the domestic and international community. The elimination of environmental pollution greatly depends on professional environmental protection companies. China’s environmental protection industry has sustained a rapid growth with 26.9% annual growing rate of output value since 2011. To effectively discover the potential investment fields and regions, this study examines the spatial distribution of 53 A-Share Listed Environmental Companies (ASLEC) in China and their 927 subsidiaries. Methods of hot spot analysis, Pearson’s correlation analysis and coarsened exact matching were employed in our paper to reveal the spatial distribution characteristics of environmental protection industry and their main influencing indicators. Results show that ASLEC invested over US$ 13 billion distributed in 210 cities in China in 2017. Treatment of wastewater and municipal solid waste related to traditional water supply, drainage and sanitation are the main businesses of the environmental protection industry in China. This is because these businesses belong to conventional urban municipal works with low technological requirement and high economic return. Therefore, the government should support those environmental protection businesses with fine technology, such as air pollution prevention and industrial waste control. Our study also reveals that there is a strong and positive correlation between municipal indicators and environmental protection investment. This indicates that the municipal works attract much more investment of environmental protection companies than heavy industries. The eastern region of China remains a hot spot for investment whereas the investment in the western region increased significantly in 2017. The potential of future development will be located in the central and western regions. For serious air pollution and large-scale industrial transfer from eastern regions to the central and western regions in China, there is lack of industrialization environmental protection capacity to fulfill the ambitious national pollution reduction target. This opportunity implies to attract more investments from international environmental protection companies.