The Influence Of Environmental Regulation On The Performance Of Industrial Enterprises

Since the reform and opening-up,China’s economy has achieved great-leapforward development,but a series of serious environmental problems have also been accumulated in the process of rapid development.In recent years,the party and the government have been fully aware of the severity of environmental problems,and have increased the intensity,diversity and flexibility of environmental regulation means.However,environmental regulation policies will inevitably influence economic development,so formulating reasonable environmental regulation policies is very important for coordinating economic development and environmental protection.The enterprises are important market bodies,the development of enterprises is a decisive factor of the overall macroeconomic operation,and the enterprises are also the main regulation objects of the environmental regulation policies.Therefore,it is of great significance to study the relationship between environmental regulation and enterprise performance and put forward corresponding policy enlightenment.This paper takes the panel data of China’s Shanghai and Shenzhen A-share listed industrial enterprises from 2013 to 2017 as research sample.Firstly,the panel two-way fixed effect model is used to study the impact of environmental regulation on enterprise performance.Secondly,considering that under China’s special institutional background of political centralization and fiscal decentralization between central government and local governments and the mechanism of "political promotion championship",competition among local governments may cause deviation in the implementation of environmental regulation policies and affect the implementation effect of environmental regulation policies,so this paper further studies whether competition among local governments plays a moderating effect in the impact of environmental regulation on enterprise performance.Thirdly,this paper carries out heterogeneity analyses based on the degree of industry pollution,the region and enterprise scale.Finally,according to the research results,this paper puts forward policy implications for the government to formulate and implement environmental regulation policies reasonably and for enterprises to deal with environmental regulation scientifically and effectively.The research results are as follow:first,overall,China’s environmental regulation will improve enterprise performance at the present stage;Second,competition among local governments plays a negative moderating effect in the impact of environmental regulation on enterprise performance,competition among local governments adversely affects the implementation effect of environmental regulation policies.Third,the results of heterogeneity analyses show that environmental regulation has a greater promoting effect on the performance of enterprises belonging to heavy pollution industries,enterprises in the eastern region and large-scale enterprises.The main innovation of this paper may be that it considers the impact of competition among local governments on the implementation effect of environmental regulation policies,which has a certain policy reference value for the government to take reasonable degree of implementation of environmental regulation policies.