Central Environmental Supervision,Political Affiliation And Corporate Environmental Investment

In the grand historical journey of building a moderately prosperous society,the stage of China’s economic development has shifted from high-speed development to high-quality development.While accelerating the industrialization process,pollution emissions and energy consumption have increased significantly,leading to increasingly prominent ecological and environmental problems.However,as the main body of resource consumption and pollution emissions at this stage,enterprises have limited willingness to actively participate in environmental protection investment.In response,the central government has raised the importance of environmental protection and gradually changed the environmental governance model.The 20 th Party Congress report further clarified the strategic tasks of China’s ecological civilization construction in the new era,and put forward a series of new goals and requirements for ecological civilization construction,with the help of various environmental regulatory measures to build a government-led,business-led,public participation environmental governance system and implement the main responsibility for ecological and environmental protection.in July 2015,the 14 th meeting of the Central Leading Group for Comprehensively Deepening Reform considered and adopted the Environmental Protection Inspector Program(Trial)",dedicated to strengthening the power and responsibility of local government departments to guide the environmental behavior of enterprises,China’s environmental monitoring system to achieve from "supervision of enterprises" to "supervision of government"to "party and government share responsibility "an important shift.Local governments,as the main actors in providing public services and performing environmental monitoring tasks,have a certain rent-seeking behavior of exchanging the environment for development,and enterprises will actively seek political connections in order to expand their production and thus reduce the penalties of environmental regulations.Therefore,the study of corporate environmental investment cannot yet be separated from the consideration of political connections.In view of this,this thesis compares and summarizes the relevant literature at home and abroad,and analyzes the mechanisms of central environmental protection inspectors and political connections on corporate environmental investment based on environmental externalities,principal-agent theory,rent-seeking theory,etc.It selects Chinese A-share listed companies from 2012 to 2020 as research objects to empirically investigate the effects of central environmental protection inspectors and political connections on corporate environmental investment,and the moderating effects of political connections on the effects of central environmental protection inspectors’ policies,and further explores the effectiveness of central environmental protection inspectors’ system of governance based on different property rights,regional economic development,and regional environmental regulation.The results show that(1)compared to other types of enterprises,central environmental protection inspectors can effectively promote environmental protection investment in heavily polluting enterprises and form a certain sustained mechanism,but their positive effects continue to diminish as time advances.(2)Political affiliation has a dampening effect on the level of environmental protection investment by enterprises.(3)Political affiliation moderates the effectiveness of the implementation of the central environmental protection inspectors,i.e.,when firms do not have political affiliation,the positive effect of the central environmental protection inspectors is significantly enhanced,which can effectively improve the level of corporate environmental protection investment.(4)Further research finds that the implementation effect of central environmental protection inspectors is affected by differences in the nature of enterprise property rights,regional economic development,and the degree of regional environmental regulation,i.e.,the positive effect of central environmental protection inspectors on environmental protection investment by non-state enterprises is more pronounced;the effect of central environmental protection inspectors is accentuated in regions with better regional economic development and stricter environmental regulation.The findings of the study help to further understand and appreciate the relationship between government and enterprises in the new era,while providing empirical evidence to stimulate and guide enterprises to participate in environmental governance,help to solve the outstanding problems of resource and environmental constraints,and vigorously promote the modernization of environmental governance system and governance capacity.