Environmental Regulation, Financing Constraints, And Corporate Performance

Since the 1980 s,China's economy has entered a stage of rapid development,the urban and industrial expansion caused by which,will inevitably lead to environmental pollution and the overall decline of ecological functions.Because of the extensive mode of production,unreasonable industrial structure,the speed of economic development exceeding the carrying capacity of resources and environment lead to the serious imbalance between environmental protection and economic development.Therefore,the extensive economic development mode at the cost of polluting the environment and overdrawing the ecology needs to be changed urgently.China needs to explore a way of sustainable development in which economic development and environmental protection are coordinated and win-win.In recent years,China has taken a series of important measures to protect and control the environment in order to establish and improve the environmental protection system.As an important subject of pollution prevention and environmental protection,enterprises must constantly strengthen their environmental protection concepts and legal responsibilities,especially for heavy pollution enterprises.In order to achieve emission reduction,heavy polluting enterprises need to actively change the mode of production and operation,increase technological innovation,improve resource utilization efficiency,and actively assume environmental responsibility.A series of countermeasures may also face various obstacles,such as shortage of funds,financing risk,failure of technology development,high cost,crowding out other investment opportunities,and ultimately affect the performance of enterprises.Enterprises are usually sensitive to factors that affect their performance.Therefore,the formulation and implementation of environmental regulation should not only pay attention to the environmental effect,but also pay more attention to the response of enterprises to environmental regulation.The latter is the key factor that decides whether the environmental regulation goal can be achieved and the expected regulatory effect can be achieved.Only by achieving a win-win relationship between environmental performance and enterprise performance can enterprises really be motivated to actively formulate environmental protection strategies and implement the environmental protection strategy.In the process of enterprises coping with environmental regulation,the capital situation is closely related to the decision-making of enterprises' environmental protection strategy.As the main source for project investment,external funds are affected by the environmental protection investment itself,which is “long cycle,high investment and high risk”.Its financing cost is often high,which reduces project income and enterprise performance,that is to say,financing constraints may regulate the impact of environmental regulation on corporate performance to some extent.This paper takes the A-share heavy pollution industry from 2010 to 2016 as a sample to study the impact of different environmental regulation means on the performance of enterprises,the impact of financing constraints on the performance of heavy polluting enterprises and the mediating function of financing constraints.The results show:(1)The direct regulatory means in environmental regulation have a restraining effect on enterprise performance,and the restraining effect has a time lag effect.The direct regulatory means will not affect the short-term financial performance of enterprises,but have a significant restraining effect on the performance of enterprises with two lags.On the contrary,economic means can significantly promote the performance of enterprises;but there is no obvious relevant relationship between soft means and enterprise performance.(2)Further research finds that direct regulation has a stronger inhibitory effect on the performance of state-owned enterprises than non-state-owned enterprises,while economic means can play a greater economic incentive effect in state-owned enterprises,while soft means have no significant impact on the performance of state-owned enterprises and non-state-owned enterprises.(3)The role of direct regulation and economic means in eastern China is quite different from that in inland China.Specifically,the enterprises in the inland areas of central and Western China are more restrained by direct control measures,and the response to economic incentives is not as effective as that in the eastern region.Similarly,soft means have not played their role in all regions.(4)Financing constraints have a significant lag inhibition effect on corporate performance,and this effect has a great difference in enterprises with different property right or in different regions.(5)Finally,the paper examines the regulatory effect of financing constraints,and finds that the existence of financing constraints enhances the inhibitory effect of direct control measures on enterprise performance,offsets the promotion effect of economic means on enterprise performance,and has no obvious regulatory effect on soft means.According to the research conclusion,this paper puts forward the general planning idea of China's environmental regulation system: Achieve comprehensive measures,that is,achieve the comprehensive use of three means,complementary advantages(Yuwei et al.,2016),not only to make good use of administrative and legal means of direct control,but also to make more use of market,economic and technological means,and to strengthen the development and utilization of soft means.In this paper,the author puts forward some suggestions on how to optimize the direct regulation,economic and soft means,as well as suggestions on the construction of guarantee measures of financing mechanisms matched with China's environmental investment.This study is helpful for the government to understand the current situation of China's environmental regulation tools system,to reasonably judge the Micro-role of environmental regulation tools,and to promote enterprises to fulfill their environmental protection responsibilities by optimizing the implementation means of enterprise environmental regulation and improving the supporting financing mechanism.This study takes into account the environmental,economic and social benefits of environmental policy,aiming at achieving a win-win situation between enterprise development and environmental governance.It is not only conducive to emission reduction of pollution,improvement of environmental quality,adjustment and optimization of enterprise growth and structure,high-quality economic development,but also conducive to eliminating and resolving social contradictions and promoting social harmony and stability.