An Empirical Study On The Impact Of Environmental Pollution Liability Insurance On Enterprise Financialization

Since the reform and opening up,China has achieved remarkable economic achievements that have amazed the world.The extensive and environmentally friendly development approach has indeed brought a brief and rapid leap to the Chinese economy,but at the same time,it has caused irreparable damage to the environment on which people rely for survival,especially in heavily polluting industries.Due to the obvious negative externality of environmental pollution caused by high polluting enterprises,relevant national departments have made a series of mandatory provisions for high polluting enterprises through laws and policies,aiming to internalize the externality costs of environmental pollution caused by high polluting enterprises through environmental regulation,which is also one of the key measures taken by relevant departments in China to further guide high polluting industries to actively promote the development of green environment.Many scientific research and practical achievements have confirmed that most of China’s previous environmental regulations have achieved positive and efficient environmental governance results.However,some scholars believe that although environmental regulation has achieved the obvious goal,the cost problem caused by environmental pollution is also likely to urge SMEs to abandon the real industry and turn to the financial services industry to seek Lebensraum and more profit space,thus triggering the financial melting of real enterprises.The report of the 20 th National Congress of the Communist Party of China pointed out that the focus of building the Chinese economy should be placed on the real economy and gradually attract small and medium-sized enterprises to return to the real field.Environmental pollution liability insurance may play an important role in guiding China’s heavily polluting enterprises to break free from virtual reality and return to reality.Environmental pollution liability insurance,as an important part of green finance in China,is not actively insured by Chinese enterprises.Environmental liability insurance has the function of dispersing and transferring risks.For the government,environmental pollution liability insurance can help alleviate the pressure of environmental governance.For enterprises,timely access to funds to resume operations and reduce economic disputes caused by infringement;For environmental damage and third-party damage,timely funding can be obtained for repair,compensation,and treatment.Overall,purchasing environmental liability insurance is beneficial for the sustainable development of enterprises,the happiness and health of the people,and the harmony and stability of society.Therefore,it is urgent to strengthen the attention of the government and enterprises to environmental pollution liability insurance.Therefore,this article is based on the list of enterprises that purchased environmental pollution liability insurance in 2014 and 2015 published by the Ministry of Ecology and Environmental Protection of China.The research object is listed companies in the heavy pollution industry of Shanghai and Shenzhen A-shares,and empirical methods are used to explore whether the purchase of environmental liability insurance by Chinese heavy pollution enterprises affects their financialization and explore the internal impact path,Based on whether the purchase of environmental liability insurance affects corporate financialization-whether the purchase of environmental liability insurance affects corporate financialization through financing constraints and business operations-whether the purchase of environmental liability insurance has heterogeneity in terms of different company nature,industry competition,and environmental regulations for enterprises-what inspiration does the study of the impact of purchasing environmental liability insurance on corporate financialization bring.Finally,it can be concluded that: firstly,purchasing environmental liability insurance will have a restraining effect on the level of corporate financialization;Second,there is a partial mesomeric effect between financing constraints and corporate operating conditions in the process of environmental pollution liability insurance inhibiting corporate financialization.Thirdly,the impact of purchasing environmental liability insurance on corporate financialization is more significant for non-state-owned enterprises and enterprises with higher levels of industry competition.Starting from the innovative perspective of corporate financialization,this article studies the relationship between heavily polluting enterprises purchasing environmental liability insurance and corporate financialization,which can enrich the research on the influencing factors of corporate financialization and further provide empirical evidence for the conclusion that environmental liability insurance affects China’s economy.This paper attempts to explore the internal mechanism of environmental liability insurance affecting corporate financialization,and establishes a mesomeric effect model based on financing constraints and corporate operating conditions.Finally,it finds some intermediary effects between financing constraints and corporate operating conditions,which enriches the research on the relationship between environmental liability insurance and corporate financialization.The research in this article indicates that purchasing environmental liability insurance can guide the real economy to return to its original state,prevent physical enterprises from shifting from reality to emptiness,and reduce systemic risks to a certain extent,in order to promote the healthy development of the economy.