Research On The Influence Of Environmental Regulation On The Financial Performance Of Petrochemical Enterprises From Agency Cost Perspective

The modernization of socialism with Chinese characteristics has always put the construction of ecological civilization in a prominent position,and the petrochemical industry,as an important part of the national economy,has been highly regarded by China’s environmental protection and other related departments for its severe environmental pollution problems.Environmental regulation is a powerful system to control the pollution emission of enterprises and urge them to protect the environment,which may have a push-back mechanism to improve the financial performance of petrochemical enterprises.Combined with the principal-agent theory,the agency problem is a fundamental part of corporate governance research.When petrochemical companies face the impact of environmental regulation,the internal principal-agent problem may be alleviated with the adjustment of corporate business strategies and the improvement of environmental governance,which may have an impact on the financial performance of the companies.Therefore,this paper studies the impact of environmental regulation and agency cost on the financial performance of petrochemical enterprises and seeks the path to improve the financial performance of petrochemical enterprises.The paper uses literature research and empirical analysis to study the impact of environmental regulation on the financial performance of petrochemical companies from the perspective of agency costs,and draws conclusions and makes recommendations based on the empirical results.Firstly,we introduce the background and significance of the study,review the relevant literature,analyze and summarize the current situation of domestic and foreign research,define the concepts of petrochemical companies and environmental regulation,and introduce the theories of Porter’s hypothesis and principal-agent theory to lay the foundation of the study.Secondly,the research hypotheses are proposed in terms of environmental regulation,the impact of agency costs on financial performance of petrochemical enterprises,and the mediating role of dual agency costs,and the empirical research design,data selection,variable definition and empirical model construction are conducted.Again,on the basis of the factor analysis method used to comprehensively measure the financial performance of petrochemical enterprises,a regression analysis of the relationship between environmental regulation,agency costs and financial performance of petrochemical enterprises was conducted using a time fixed effects model using stata15 to test the mediating effect of dual agency costs as a mediating variable,and to explore the impact of environmental regulation on the financial performance of petrochemical enterprises and dual agency costs,as well as the role of dual agency costs in the financial performance of petrochemical enterprises.The regression analysis is conducted to examine the effect of environmental regulation on the financial performance and dual agency costs of petrochemical companies,and the role of dual agency costs in environmental regulation and financial performance.The empirical results show that environmental regulation has a significant contribution to the financial performance of petrochemical firms,and environmental regulation has a significant inhibitory effect on dual agency costs,and dual agency costs play a positive mediating role in the process of environmental regulation affecting financial performance.Finally,summarizing the empirical findings of the thesis,based on the empirical findings of the thesis,we propose countermeasures for improving the financial performance of petrochemical enterprises at both levels of environmental regulation and agency costs.