Research On The Impact Of Corporate Environmental Responsibility Performance On Capital Cost

The rapid development of market economy not only improves people’s living standards,but also causes serious pollution to the environment.As the main body of economic activities,corporations must fulfill corresponding environmental responsibilities.At the present stage,the government has formulated laws and regulations such as the New Environmental Protection Law,and strengthened the punishment of environmental violations,aiming at promoting the awareness of environmental responsibility of stakeholders and corporations,including investors and creditors.At the same time,corporations have been facing difficulties in financing and expensive financing.Under the current reality of our country,whether the positive environmental responsibility of corporations can help them to obtain financing advantages and reduce capital costs remains to be further explored.Based on China’s capital market,this paper systematically explores the impact of corporate environmental responsibility performance on the cost of equity capital and the cost of debt capital,and takes into account the moderating effect of industry nature and regional nature,in order to clarify the economic consequences and boundaries of corporate environmental responsibility,so as to promote the performance of environmental responsibility.The conclusion of the study is helpful to clarify the economic consequences and function boundaries of corporate environmental responsibility,promote corporations to consciously enhance their awareness of environmental protection and assume the responsibility of environmental protection,and provide empirical basis for the formulation of environmental protection policies of our government.Based on stakeholder theory,organizational legitimacy theory and resource-based theory,this paper analyses the impact mechanism of environmental responsibility performance on the cost of capital in local context,and puts forward the hypothesis of this paper.Corporate environmental responsibility can reduce the cost of equity capital by reducing the level of corporate risk,establishing reputation capital,expanding the investor group,and reduce the cost of debt capital by reducing default risk and obtaining preferential policies.Moreover,investors and creditors may pay more attention to the performance of corporate environmental responsibility in the eastern region and heavy pollution industries.Subsequently,this paper takes Shanghai and Shenzhen A-share listed corporations from 2012 to 2017 as samples,and uses content analysis method to construct an evaluation system to measure the level of corporate environmental responsibilityperformance for empirical research.The regression results show that there is a significant negative correlation between the corporate environmental responsibility performance and the cost of equity capital and debt capital.That is to say,environmental responsibility performance really helps corporations to obtain the financing advantages of capital market and reduce their own costs of capital.The nature of region and industry will affect the relationship between them to a certain extent.Compared with the non-eastern region and non-heavy polluting industry,the corporations of eastern region and heavy polluting industry perform environmental responsibility more effectively to reduce the cost of capital,and the regional nature will affect the regulatory role of the industry nature to a certain extent.