Research On The Impact Of Environmental Regulation On The Vertical Boundary Of Enterprises

Since the reform and opening up,China’s economy has developed rapidly,but the environmental problems caused by the process of industrialization are becoming more and more serious.After the 18 th National Congress of the Communist Party of China,environmental issues have been paid unprecedented attention in China.With the improvement of the intensity of environmental regulation and the awareness of social environmental protection,the cost of pollution in the production process of China’s manufacturing enterprises is gradually rising,so energy saving and emission reduction has become an important direction of upgrading the manufacturing industry.How to deal with the relationship between economic development and energy conservation and emission reduction has become an important issue in academia.However,the current unbalanced development of Chinese enterprises is very serious.It is difficult for the government to carry out effective environmental supervision on small and medium-sized enterprises.Coupled with the lack of responsibility in China’s current supply chain,the procurement policy of downstream enterprises is not sensitive to the environmental performance of suppliers,resulting in the frequent occurrence of supplier pollution problems in large enterprises,which also leads to a new hidden danger,that is,whether the rise of environmental regulation will promote the development of enterprises So that downstream enterprises can narrow the vertical boundary to transfer pollution through the supply chain.This paper first analyzes the impact mechanism of environmental regulation on the vertical boundary of enterprises;then establishes a market equilibrium model composed of downstream large enterprises and small and medium-sized suppliers,and takes the allocation of social responsibility in the supply chain and reputation loss caused by corporate pollution into the model to systematically investigate the impact of environmental regulation on the vertical boundary of downstream large enterprises.In order to test hypothesis,this paper makes an empirical analysis based on the panel data of listed companies in heavy polluting industries in China from 2010 to 2017,and makes a special test on the moderating effect of reputation loss.The results show that: first,the increase of the intensity of environmental regulation will cause large enterprises to reduce the vertical boundary,which indicates that large enterprises in China evade environmental responsibility by reducing the enterprise boundary and "pollution outsourcing";second,the reputation loss caused by illegal pollution will aggravate the inhibition effect of environmental regulation on the vertical boundary of enterprises.In view of this,this paper puts forward policy suggestions: our government should broaden the supervision channels of enterprise pollution behavior,so as to reduce the difficulty of environmental supervision of small and medium-sized enterprises,at the same time,increase the construction of domestic green supply chain,improve the public’s awareness of the environmental responsibility of supply chain through government publicity,and encourage enterprises to actively build green supply chain management through government subsidies,so as to strengthen the management of supply chain The supervision of green performance.