The Impact Of The New Environmental Protection Law On The Investment Behavior Of Polluting Enterprises

With the increasingly serious environmental pollution,the construction of ecological civilization has become a content that Chinese government attaches great importance to in economic development.China has gradually introduced a green credit policy since 2007,trying to allocate financial resources through the financial market.Subsequently,the government promulgated a New Environmental Protection Law in 2015.Different from the credit policy,the new law,as a command-and-control means of environmental regulation,emphasizes direct intervention in the investment activities of polluting enterprises.The local government should also take responsibility for pollution control and green transformation.At the same time,regulatory constraints will also make financial institutions re-evaluate investment targets,so the effect of the new law is more comprehensive.On the one hand,this paper analyzes the overall impact of the new law on the investment of polluting enterprises.On the other hand,we also analyze the intermediary effect of financing tightening and government subsidies.In addition,the study introduces social responsibility information disclosure variables that have not been discussed in previous environmental policy effect analysis.This paper uses the investment level,investment efficiency and R&D investment to measure the investment activities of polluting enterprises,and analyzes the overall effect of the new law on the three indicators.Based on the overall effect,this paper also analyzes the mediating effect of the new law on the investment behavior of polluting enterprises by setting the debt scale and debt maturity structure as the intermediary variables of financing constraints.And we also set government subsidies as an intermediary variable of government behavior to study whether the new law promotes R&D investment in polluting enterprises by stimulating government subsidies.In the equation of the above research,this paper adds the dummy variable of whether the company publishes the social responsibility report.Combined with the content of the New Environmental Protection Law,this paper believes that(1)The new law reduces the investment level of polluting enterprises through strict review mechanism and severe administrative penalties.(2)Under-investment polluting enterprises are more common in China.The effect of the new law on investment efficiency is to increase inefficient investment by expanding under-investment.(3)The impact of the new law on innovation is in line with "compliance costs".Policies tend to make polluting firms pay extra for remediation,which crowd out R&D investment.(4)The new law has affected the profitability and repayment ability of polluting enterprises,making banks reduce the loan scale and the loan term.Investment activities are also curbed as a result.(5)The new law stipulates the responsibilities of the local government,which gives the government an incentive to increase the level of subsidies,and the subsidies also help polluting companies to increase R&D investment.(6)Polluting companies that issue social responsibility reports are less constrained by environmental policies.The empirical part takes listed polluting enterprises from 2008 to 2019 as samples,and uses the DID model to study the impact of the New Environmental Protection Law on the investment behavior of polluting enterprises.According to the judgment of the China Securities Regulatory Commission on polluting industries,we divided the samples into polluted groups and non-polluted groups.The regression results of the overall effect show that the new law has a negative effect on the investment behavior of polluting enterprises.Further based on the two-step regression test of the mediating effect,we analyze the statistical significance of debt financing and government subsidies as mediating variables.The results show that the mediation effect is significant,and in terms of investment efficiency,the financing constraints of under-invested enterprises are mainly affected by the scale of debt.In the robustness test part,on the one hand,we used a placebo test of dummy policy implementation,and on the other hand,we considered replacing the measurement of some indicators.The results also support the previous conclusions.