Internal Control Quality,Financing Constraints And Green Investment

In recent years,China’s economic development has shifted from high-speed development to high-quality development,abandoning the previous practice of sacrificing the ecological environment for economic development speed.The report of the 20 th National Congress of the Communist Party of China clearly proposes to promote green development and promote the harmonious coexistence of human beings and nature."Green development",as one of the new development concepts,requires enterprises to actively assume the social responsibility of protecting the environment and strengthen their green investment behavior while paying attention to economic benefits,thereby helping China achieve economic transformation and sustainable development.As a direct measure of environmental governance for enterprises,green investment has its particularity and is more susceptible to constraints from financing constraints.Therefore,whether internal control,as the basic structure of corporate governance,can promote green investment and effectively promote the process of enterprise greening,and what role financing constraints play between internal control and green investment,relevant issues deserve in-depth discussion.Based on a review and analysis of relevant literature on internal control,financing constraints,and green investment at home and abroad,this paper studies the relationship between internal control quality,green investment,and financing constraints from the perspective of effectiveness,using internal control as a starting point.At the same time,financing constraints are introduced as intermediary variables to test the transmission path of the impact of internal control quality on green investment,with a view to opening the black box of enterprise green investment behavior.This article uses social responsibility theory,information asymmetry theory,and principal-agent theory to analyze and propose research hypotheses.It selects listed companies in the heavily polluting industries of Shanghai and Shenzhen A-shares from 2010 to 2020 as sample data,constructs relevant models,and conducts descriptive statistics,correlation analysis,and regression analysis in turn.It also uses instrumental variables,propensity score matching,and replacement variable measurement methods such as avoiding the impact of policy revisions and lagging independent variables are used for robustness testing.On this basis,the relationship between internal control quality and green investment,financing constraints,and the role of financing constraints in the process of influencing green investment by internal control quality in enterprises with different property rights and scales are further studied.The results show that high-quality internal control can promote green investment in enterprises;High quality internal control can alleviate the degree of financing constraints of enterprises;One of the important transmission mechanisms of high-quality internal control affecting green investment is to alleviate the degree of financing constraints of enterprises,thereby promoting the level of green investment of enterprises,in which financing constraints play a partial intermediary role.In addition,the promotion effect of high-quality internal control on green investment is more significant in state-owned enterprises and large-scale enterprises,and the inhibitory effect of internal control quality on financing constraints is more significant in non-state enterprises and small-scale enterprises.Financing constraints in state-owned enterprises and small-scale enterprises exhibit a significant partial mediating effect in the process of the impact of internal control quality on green investment.The possible contributions of this article are as follows:(1)Different from previous literature that mostly studies the factors and mechanisms affecting green investment in enterprises based on the external environment,internal control is used as a starting point to study the relationship between the quality of internal control and green investment in enterprises from the perspective of effectiveness;(2)Introducing financing constraints as an intermediary variable,this paper examines the transmission path of the impact of internal control quality on green investment,and opens the "black box" of the mechanism by which internal control affects green investment.(3)Define new scenarios for research on internal control quality,financing constraints,and green investment,analyze the differences in the direct impact of internal control quality on green investment and financing constraints among enterprises of different property rights and sizes,as well as the differences in the intermediary effect of financing constraints,so as to provide more targeted suggestions and help different types of enterprises improve their green investment capabilities.