Research On The Impact Of The New Environmental Protection Law On The Financial Performance Of Highly Polluting Enterprises

Since the reform and opening,the Chinese economy has achieved remarkable achievements,but the economic achievements have been obtained at the expense of the environment.The pollution situation is becoming increasingly serious,and it is urgent to solve environmental problems.The report of the 19th National Congress pointed out that it is necessary to increase environmental governance,improve pollution discharge standards,strengthen the responsibility of polluters,and improve the system of environmental credit evaluation,mandatory disclosure of information,and severe punishment.At the same time,General Secretary Xi Jinping proposed that"Only the strictest system and the strictest rule of law can provide reliable guarantee for the construction of ecological civilization." Environmental issues have risen to the national strategic level and have become an important issue of concern to the current government.However,China is still a developing country.As economic development gradually enters a transition period,whether environmental and corporate financial performance can be coordinated and developed has attracted much attention.The impact of environmental regulation policies on corporate financial performance has become a hot issue.This paper takes the new "Environmental Protection Law" which was promulgated in 2014 as the starting point,based on the micro perspective of the enterprise,exploring the impact of the environmental regulation policy on the financial performance of high-pollution industry enterprises before and after the promulgation of the environmental regulation policy,to provide an empirical basis for understanding the impact of environmental regulation policies on financial performance,and to examine the impact mechanism.The results of the paper can evaluate the policy effects of the new Environmental Protection Law and provide empirical evidence for its further development and improvement.First of all,this paper proposes research hypotheses based on the theory of corporate social responsibility,information asymmetry theory and stakeholder theory,taking the annual data of 828 companies in the Shanghai-Shenzhen A-share listed industrial manufacturing industry from 2006 to 2016 as a sample,taking the promulgation of the new "Environmental Protection Law" as the quasi-natural experiment,DID method is used to empirically test the impact of the promulgation of the new "Environmental Protection Law" policy on the financial performance of enterprises in high-pollution industries,and the impact of property heterogeneity and industry heterogeneity on the correlation between the two is analyzed.Subsequently,the level of environmental information disclosure,the innovation input variables of enterprises,and the mediation effect model were used to analyze the transmission mechanism and intermediate process.The main conclusions of this paper:Environmental regulation policies have a significantly negative correlation with corporate financial performance-the promulgation of the new "Environmental Protection Law" has reduced the financial performance of highly polluting enterprises.This conclusion indicates that this environmental regulation policy has a restraining effect on corporate financial performance and supports the traditional hypothesis;as the nature of corporate property rights,state-owned enterprises are more in compliance with environmental regulation policies than non-state-owned enterprises;the impact of environmental regulation policies on companies in different industries is also heterogeneous;as for the impact mechanism of environmental regulation policies on corporate financial performance,in the impact of the promulgation of the new Environmental Protection Law on corporate financial performance,the level of environmental information disclosure and corporate innovation investment have a mediating role.The conclusions show that the promulgation of the new "Environmental Protection Law"has reduced the financial performance of highly polluting enterprises,indicating that strict environmental regulations and policies sacrifice economic benefits in exchange for environmental financial performance,but this is not an ideal result in the long run.The purpose of government environmental regulation should be to promote the coordinated development of the economy and the environment.Based on the conclusions of this paper,the following recommendations are made:First,the government:to improve the flexibility of environmental regulation policies,should consider the ability of enterprises to bear in the formulation of environmental regulation policies,can not take a "one size fits all" approach to enterprises in different business life cycle;technological innovation requires financial assistance,accelerates the improvement of corporate technology innovation support policies;increases communication with enterprises;encourages green consumption promotion,and promotes the formation of the concept of green consumption.Second,the enterprise:enhance the awareness of environmental responsibility,adjust the development strategy to complete the technology upgrade as soon as possible,innovate the production technology,give priority to meeting the standards set by the government,and ensure its own interests and maintain long-term competitiveness in the future market.Possible innovations in this paper are:(1)This paper does not directly measure environmental regulation,but takes the specific environmental regulation policy-the new "Environmental Protection Law"policy promulgation as a research perspective,and takes the new "Environmental Protection Law" in 2014 as a quasi-natural experiment.Using DID method empirically validates its policy effect on corporate financial performance.(2)When the literature has studied the relationship between environmental regulation policies and corporate financial performance,there is little consideration of the impact of environmental information disclosure levels,for the first time,the new "Environmental Protection Law" clearly requires the heavily polluting enterprises to disclose detailed environmental information from a legal perspective,and regulate the information disclosure behavior of enterprises in a legal form.Therefore,environmental information disclosure may become one of the influences of environmental regulation policies on corporate financial performance.This paper introduces the variable“environmental information disclosure level”into the mediation effect model and uses the mediation effect model to further explore this.