A Study On The Relationship Between Environmental Regulation And Corporate Performance In China's Heavily Polluting Industries

As environmental problems have become increasingly prominent,government has attached great importance to this issue and there is no doubt that companies in heavily polluting industries are the focus of government supervision.The traditional view is that in the face of various environmental policies issued by the government,companies will increase investment in environmental protection,which will cause enterprises to reduce other aspects of investment,increase the cost of production and operation of the enterprise,and have a negative impact on corporate performance.However,some scholars have objected that environmental regulations may stimulate enterprises to carry out technological innovation and it will improve corporate performance in the long run.Therefore,based on externality theory,Porter hypothesis,and social responsibility theory,this paper conducted a study on the relationship between environmental regulation and corporate performance,and adds technological innovation inputs and outputs as mediating variables based on technological innovation theory to examine their role in the relationship between environmental regulation and corporate performance.The research sample in this article is the relevant data of China's A-share heavy polluting industry enterprises from 2012 to 2017.Through theoretical deduction and empirical research,this article draws the following conclusions: Among listed companies in China's heavily polluting industries,(1)Environmental regulations have no significant effect on the current period of corporate performance,but they are significantly positive related to the lagging period of corporate performance;(2)Environmental regulation affects corporate performance through the promotion of technological innovation inputs and outputs,and technological innovation plays an intermediary role in the relationship between the two;(3)Further research discovers that environmental regulations had amore remarkable impact on the performance of heavy polluting enterprises and state-owned enterprises.In terms of theoretical significance,this paper proves that environmental regulations have a significant positive correlation effect on corporate performance,technology innovation plays an intermediary role in the relationship between environmental regulation and corporate performance,and enriches policy formulation at the macro level and organizational behavior at the micro level.In terms of practical significance,it can provide theoretical support for the government to formulate relevant environmental policies,and at the same time,it can also provide corresponding support for enterprises to adjust their behaviors according to environmental policy trends.