Environmental Protection Department Director's Turnover,Political Cycle And Corporate Environment Investment

Non-competitive and non-exclusive nature of the ecological environment in the process of consumption may lead to external issues such as “Communal Tragedy” or “Free Rider”.The command-oriented environmental regulation is still the main way of internalizing the externalities of Chinese environment.Under the fiscal decentralization system,local environmental protection departments fulfill the corporate environmental supervision function which consists of the important reason of enterprise environmental governance.To this end,we adopt the sample of listed companies in China from 2007 to 2014,and examine the impact of Environmental Protection Department Director's(EPDD)change on corporate environmental governance.The study found that corporate environmental governance intensity changed with the political cycle of EPDD turnover,and the cycle characteristics still exist when control of the impact of Secretary and Governor changing.In the year of change,the director of environmental protection has a stronger impetus to environmental investment than any other year in which no change has been made.Exploring these internal mechanisms from the perspectives of environmental supervision and environmental support shows that with the fiscal independence constraint,local environmental protection.Department mainly promotes corporate environmental investment by increasing the sewage charges of enterprises,but there is no such feature of environmental subsidies.Further research found that,when the new EPDD is promoted and younger,the cyclical characteristics of corporate environmental investment are more pronounced,but it has no significant difference between changes inside and outside of the system.Above all,the paper reveals the mechanism of environmental governance from the perspective of political economy,which has some implications for further improving the government's environmental supervision function and realizing the construction of ecological civilization.