Research On Environmental Regulation And Debt Financing Cost

In today's increasingly competitive society,the convenience and perfection of financing mode is an important guarantee for enterprises to obtain competitive advantage and long-term development.Debt financing is a main way of financing,and the cost of debt financing is a key factor in the management of a company.In recent years,with the rapid development of economy,the environmental harm has become increasingly prominent.To achieve a balance between economic benefits and environmental protection responsibilities is not only the long-term goal of enterprise development,but also the focus and research hotspots of scholars.It is everyone's responsibility to protect the environment,and the leading role of government departments cannot be ignored.In order to strengthen the supervision of government departments and restrict the pollution behavior of enterprises,the environmental performance is gradually incorporated into the index system that affects the debt financing cost of enterprises,so the environmental regulation comes into being.As one of the most important systems to evaluate the operation effect of the enterprise,internal control is also related to the cost of debt financing.The quality of internal control can reflect the operation effect and risk situation of an enterprise.The fund provider can make investment decisions according to the quality of internal control of an enterprise,and the decision results can affect the financing cost.Therefore,this paper focuses on Research on environmental regulation and debt financing cost —Mediation based on internal control.The paper mainly studies the relationship among environmental regulation,internal control and debt financing cost.It takes 2014-2017 A-share heavy pollution industry data of Shanghai stock market as the research sample,and takes information asymmetry theory,principal-agent theory,stakeholder theory,signal transmission theory and legitimacy theory as the theoretical basis of the research.It measures the debt financing cost by dividing the interest expenditure by the total debt,the environmental regulation intensity is measured by the PITI index of each city jointly issued by IPE and NRDC,and the internal control quality is measured by the "Dibo China listed company internal control index".The multiple regression model is used to investigate the mechanism among environmental regulation,internal control and debt financing cost from theoretical and empirical perspectives.The paper draws the following conclusions through empirical test: Firstly,local governments strengthen environmental regulation,which can significantly reduce the cost of corporate debt financing Secondly,internal control plays a significant part in mediating the relationship between environmental regulation and debt financing cost.That is to say,strengthening environmental regulation can effectively improve the quality of internal control of enterprises,so as to help enterprises further reduce the cost of debt financing.At the same time,based on the above research results,combined with the current situation of China's environmental policies and internal control policies,the paper puts forward relevant suggestions: first,strictly formulate environmental regulation policies and improve the environmental awareness of the public.Second,strengthen the construction improvement of internal control system and improve the quality of internal control.Third,strengthen government supervision and expand the scope of environmental regulation policy.Finally,through the research,it provides feasible measures for Chinese enterprises to alleviate the financing pressure and reduce the financing cost.