Corporate leverage manipulation,undertaken by companies to comply with policies,evade regulation,and en-hance financing capabilities,is a common practice.In an era emphasizing sustainable development principles,the question of whether efforts devoted to environmental performance can effectively address corporate leverage manipulation remains open for discus-sion.Based on a sample of A-share listed companies in Shanghai and Shenzhen from 2012 to 2023,this paper investigates the im-pact of environmental protection investment on corporate leverage manipulation and its potential mechanisms.The study finds that environmental protection investment significantly reduces corporate leverage manipulation,and this effect is strengthened by the in-tensity of regional environmental regulations,the attributes of heavily polluting industries,and the low degree of market competi-tion.The mechanism tests suggest that environmental protection investment helps companies secure debt financing and improve their ESG performance,thereby curbing leverage manipulation.From the perspective of leverage manipulation,this paper reveals the positive role of environmental protection investment in corporate governance,highlighting the importance of sustainable development in enhancing the quality of accounting information in listed companies.It also provides insights for government authorities on regula-ting corporate behavior and preventing systemic financial risks through environmental practices.
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