The Impact Of Environmental Regulation On Corporate Green Investment

Since reform and opening up,our economy and society have developed rapidly and people’s living standards have improved markedly.However,at the same time,the resource and environmental problems also emerge in endlessly.In order to effectively contain the severe challenges posed by the continued deterioration of China’s resources and environment,the report to the 19 th National Congress of the CPC clearly states that we should promote green economy,develop green finance,and promote green investment by enterprises.As the main driving force to promote the green transformation of enterprises,green investment is not only conducive to shaping the core competitive advantages of enterprises,but also an important basis for ecological civilization construction,sustainable development and the realization of the "two-carbon" strategy.However,from the perspective of micro-subject practice,the overall green investment level of enterprises is still low at present.Most enterprises still adopt a wait-and-see attitude and lack the willingness and action to take the initiative in green investment.The road to green transformation is still arduous.Environmental regulation is the main means for government to encourage and restrict enterprises’ environmental behavior.On the one hand,it will increase enterprises’ pollution control costs(i.e.,"compliance cost" effect).On the other hand,it may also promote enterprises to carry out technological innovation(" innovation compensation" effect)and occupy the green lead,which has been widely recognized by the academic circle.However,although there are a few preliminary studies on how environmental regulation affects corporate green investment and its micro-mechanism and influence mechanism,the depth and breadth are still insufficient and need to be further studied.Therefore,this paper takes the pilot implementation of low-carbon cities as an opportunity to build a progressive differential model and test the effect of low-carbon pilot policy,a characteristic environmental regulation,on enterprises’ green investment,which has important theoretical and practical significance.The research conclusions of this paper include theoretical and empirical conclusions.It is a very important theoretical and practical problem how environmental regulation promotes enterprises’ green investment.The existing researches are still lacking,especially the empirical analysis focusing on the impact of low-carbon policies on green investment.Therefore,this paper selects A-share listed companies in Shanghai and Shenzhen stock exchanges from 2007 to 2019 as research samples,regards low-carbon pilot policies as A "quasi-natural experiment",adopts the progressive difference difference model,discusses the micro-mechanism of environmental regulation and enterprise green investment,and constructs the analysis framework of environmental regulation on enterprise green innovation,and draws the following conclusions:(1)In terms of theoretical research,environmental regulation plays a positive role in promoting corporate green innovation.There is a negative correlation between pilot policies of low-carbon cities and financing constraints,that is,the implementation of environmental regulations can alleviate the difficulties of financing constraints of listed companies.A high degree of implementation of environmental regulation policies can effectively reduce the level of earnings management within enterprises,thus expanding the scale of green investment.The reason may be that the intensity of environmental regulation policies implemented by enterprises leads to the management’s consideration of "compliance costs" and media opinions,so as to restrict earnings management behavior,enhance corporate awareness of social responsibility,and increase green investment.(2)In terms of empirical research,low-carbon pilot cities can significantly improve the level of enterprises’ green investment.On the one hand,compared with state-owned enterprises,the implementation of low-carbon pilot city policies by non-state-owned enterprises has a more significant impact on green investment.On the other hand,compared with low-growth enterprises,the implementation of low-carbon city pilot policies by high-growth enterprises can have more obvious effects on green investment.The innovation point of this paper is to measure environmental regulation with the pilot policies of low-carbon cities,explore the impact of the "quasi-natural experiment" of low-carbon pilot cities on enterprises’ green investment,and put forward a new perspective of environmental regulation to study the driving factors of enterprises’ green investment.By integrating the neoclassical theory,Porter’s hypothesis,reputation theory,corporate social responsibility theory and other basic theories,this paper deeply explores the internal law between environmental regulation and green investment,analyzes the micro-mechanism of environmental regulation affecting corporate green investment,puts forward the analytical framework of environmental regulation affecting corporate green innovation,and enrichis and expands the relevant research on environmental regulation theory and green investment theory.It also puts forward policy suggestions in three aspects,namely,accelerating the implementation of urban pilot policies across the country,accelerating the improvement of the green investment level of state-owned enterprises and low-growth enterprises,and accelerating the improvement of the "government-society-enterprise" trinity environmental co-governance system.