Environmental Regulation,Political Connection And Enterprise Environmental Protection Investment

Over the past few decades,the excessive resource consumption in the extensive mode of economic growth has led to rapid accumulation and concentrated outbreak of a large number of environmental problems.China today has formed a regional and watershed pollution pattern while environmental problems such as resource depletion,environmental pollution and ecological destruction have reached the most severe and complex level in history,which seriously restricting the sustainable development of human society.In order to effectively protect the environment,the government has introduced a variety of environmental regulation policies,and the company that is the main consumer of energy and resource and the major producers of environmental pollution also began to perform the responsibility of environmental protection and pollution control,which is bound to affect their environmental investment.Moreover,it is worth noting that how political connection that is a social factor with Chinese characteristic affect the relationship between environmental regulation and corporate behavior of environmental protection investment under the context of the current system.Firstly,the paper reviews and summarizes the existing literature on environmental regulation and corporate environmental behavior,political connection and corporate investment behavior,and points out their shortcomings.On the basis of it,further defining the objectives,contents and the whole train of thought and puting the environmental regulation and political connection into the same framework to study the enterprise investment behavior in environmental protection,reflecting the characteristic of the combination of formal system and informal system.Secondly,Analyzing the impact of environmental regulation on enterprise environmental protection investment by using game theory and externality theory and the moderating effect of political connection on the relationship between environmental regulation and enterprise environmental protection investment by using rent-seeking theory and resource dependence theory,and then putting forward the corresponding assumptions.Further,based on the empirical evidence of Chinese listed companies of heavily polluting industry,the results of the study show that most of the companies lack the enthusiasm of environmental investment and their environmental investment scale is generally lower than industry average.There is a significant "U" type curve relationship between government environmental regulation and the scale of corporate environmental protection investment.When the environmental regulation intensity is low,it will not promote enterprises to increase investment in environmental protection.However,with increasing intensity of environmental regulation beyond the threshold limit,the government to strengthen the environmental regulation will promote enterprises to increase investment in environmental protection.In addition,political connection can weaken the influence of environmental regulation on scale of enterprise environmental protection investment.Compared with political connections,the scale of enterprise environmental protection investment without political connections is more affected by environmental regulation.Meanwhile,the level of Political connection can weaken the impact of environmental regulation on scale of enterprise environmental protection investment.Compared with central political connection,the scale of enterprise environmental protection investment with local political connection is more affected by environmental regulation.Finally,according to the research conclusions of empirical analysis,the paper puts forward some policy recommendations,such as flexible and diverse forms of environmental regulation,effective supervision of environmental protection from all walks of life and constraint mechanism of political connection.