| The Fifth Plenary Session of the 18th Central Committee of the Communist Party of China put forward the five development concepts of “innovation,harmonization,green,openness,and sharing”,and clearly pointed out that “the green development must be adhered to,and the basic national policy of saving resources and protecting the environment must be adhered to”.At the present stage,it is urgent to curb environmental pollution in China.We must make breakthroughs in promoting green development and seek a win-win path for economic growth and environmental protection.Enterprises are major consumers of resources and major producers of environmental problems.The key to solving the contradiction between economic growth and environmental protection lies in incorporating environmental factors into corporate investment decision-making process(Pearce et al.,1989).Green investments,a particular type of corporate social responsibility(CSR)activity that involves the allocation of financial and intangible resources of firms to transform environmental strategies and objectives into corporate actions and higher environmental performance(Ate? et al.,2012;Martin and Moser,2016),play a vital role in achieving sustainable development and maximizing social value for enterprises.What green investments should essentially aim at is the reduction of environmental pollution.Nevertheless,in reality,managerial incentives for green investments include regulatory preemption,green images creating and production cost savings(Maxwell and Decker,2006),and most companies' environmental investments are passively catering to the government's environmental regulations(Tang et al.,2013).Therefore,this research calls into question whether firm-level green investments effectively improve corporate environmental performance.This is an important economic consequence of corporate green investments,namely corporate green investment efficiency.The resources of the enterprise are limited,and the green investments could not generate direct economic benefits.To some extent,green investments transfer firm resources to other outside stakeholders,which leads to the tension between traditional performance objectives and societal value objectives.Under the stakeholder theory,firms need to strike a balance between shareholder interests and the interests of non-shareholder stakeholders(Carroll,1991).On the one hand,shareholders are reluctant to bear the opportunity costs of green investments;on the other hand,the majority of stakeholders hope that polluting firms would invest a lot of money to reduce environmental pollution.Thus,it is crucial for polluting firms to optimize the input-output efficiency of green investments.However,there is a paucity of empirical research to directly combine corporate green investments with environmental performance from the point of efficiency.Prior literature focuses almost exclusively on green investments rather than green investment efficiency,and researchers seldom examine firm-level green investment efficiency.Government is the major determinant of corporate environmental practices.China has adopted a decentralization regime of environmental regulation.The central government maintains the authority over the planning,designing,and formulation of environmental policies,while local governments are mainly responsible for the enforcement of specific environmental policies(Zheng,2007;Jin and Shen,2018).Such environmental decentralization gives local governments considerable discretion in implementing the same environmental regulations(Zhang et al.,2018),which means that the actual effect of environmental regulation depends on the strength of local environmental enforcement(Bao et al.,2013).After entering the new era of green development,China has continuously increased the proportion of environmental protection factors in the performance assessment of local government officials,and completely abandoned the past evaluation trend of “GDPonly”.These reforms have also changed the implementation of environmental regulations by local governments.Considering the differences in the development stages and reform processes of various regions of China,it is not yet known whether the enforcement of local environmental regulation can affect green investment efficiency of polluting firms.Environmental information disclosure is an effective way and carrier for enterprises to implement impression management.Faced with the increasingly strong public demand for environmental protection and the increasingly stringent environmental regulation by the government,the main purpose of corporate disclosure of social responsibility information is to influence the perception of investors and the public,enhance corporate image,and establish good reputation(Deegan et al.,2000;Guthrie and Parker,1990;Hooghiemstra,2000;Ji,2016).Especially when the firm's environmental performance is poor,the level of environmental information disclosure is relatively high(Clarkson et al.,2011;Rockness,1985;Shen et al.,2014),so as to mediate the negative impact of poor environmental performance on the corporate environmental reputation(Cho et al.,2012).This strategy of impression management—increasing the transparency of environmental information — is not easily recognized by information users.Although the government continues to strengthen the regulation of environmental disclosure,are the actions of corporate environmental governance consistent with their words? The corporate green investment efficiency is an objective and true embodiment of the effect of pollution prevention and control,which measures the“deeds” of firms.If the green investment efficiency of polluting firms is low,there will be a strong motivation to conduct impression management through the “words”of firms,resulting in that the green investment efficiency cannot be objectively and fairly reflected in the corporate environmental disclosure.Previous empirical research on firm-specific impression management has primarily concentrated on financial information disclosure,with less focus on the impression management of non-financial disclosure(Zhang and Qiu,2017).In this dissertation,I call researchers' attention to the green investment efficiency by(1)quantifying and assessing firm-level green investment efficiency with nonparametric efficiency evaluation,and(2)examining the effect of local environmental enforcement on corporate green investment efficiency,and(3)exploring the association between green investment efficiency of polluting firms and corporate environmental disclosure.The dissertation is organized as follows:Chapter 1 provides an introduction.This chapter mainly introduces the research background,puts forward the research questions,and points out the research significance of this dissertation.Further,the overall framework and research methods are elaborated,and the research innovation and contributions of this paper are summarized.Chapter 2 presents the theoretical basis and the literature review.This chapter first analyzes the related theories involved in the study of corporate green investment efficiency.Among them,the externality theory provides the theoretical basis for the fundamental source and importance of the enterprise's green investment efficiency.The theory of resource-based view and the environmental strategic management theory offer theoretical support for in-depth understanding and analyses of corporate green investment efficiency.Institutional theory,stakeholder theory,and social responsibility theory are conducive to test the effect of local environmental enforcement on the green investment efficiency of polluting firms.Signaling theory and impression management theory contribute to examine the relationship between corporate green investment efficiency and environmental disclosure.Secondly,this chapter reviews the literature on green investments,green investment efficiency,environmental enforcement of local governments,and impression management and corporate environmental disclosure.It is worth noting that an extremely important aspect of corporate green investment – to what extent is it efficient in terms of reducing pollutant emissions? – is considerably unexplored.Besides,prior research has only to a limited extent explored how local environmental enforcement influences corporate environmental practices in emerging economies,and there is seldom empirical evidence for firm-level impression management of environmental information disclosure.Chapter 3 discusses the institutional background and describes theoretical analyses.First,this chapter systematically elaborates on the evolution process and characteristics of environmental policy and environmental protection supervision system in China.Second,I clarify how the concept of corporate green investments is used in this paper,and classify green investments into green prevention investments and green treatment investments.Further,according to the input-output principle and the effectiveness of resource allocation,I clearly define what corporate green investment efficiency is.Third,this section also reviews the development trend of green investments in China and analyzes existing problems.Moreover,this chapter introduces the theory and method of measuring corporate green investment efficiency,and makes theoretical analyses of the determinants and impression management of firm-level green investment efficiency based on the perspective of environmental enforcement and environmental disclosure,respectively.Chapter 4 deals with the measurement and evaluation of corporate green investment efficiency.By linking green investments to corporate environmental performance from the perspective of efficiency,this chapter quantifies and evaluates firm-level green investment efficiency,with Data Envelopment Analysis(DEA)based on slack-based measure(SBM)approach and hand-collected emission data of Chinese listed companies in polluting industries.I find that corporate green investment efficiency is overall low,primarily due to excessive green investments,suggesting that managers only invest extensively in environmental dimensions without considering the efficient allocation and value-creating use of limited resources.Further analysis shows that,compared to the pollutant emissions,firms' green investments are highly sensitive to the efficiency value of green investments,and especially the influence of green treatment investments is the strongest.The findings of this chapter can help polluting firms to identify weaknesses and risks in environmental management,and provide a basis for firms to achieve a balance between financial and non-financial management.Chapter 5 explores the effect of local environmental enforcement on corporate green investment efficiency.I first conduct the Tobit regression and demonstrate that local environmental enforcement has an inverted U-shaped effect on green investment efficiency of polluting firms.Particularly,depending on the intensity of pollutant emissions,there are differences in the response of corporate green investment efficiency to the environmental enforcement of local governments.Second,compared to polluting firms adopting reactive environmental strategies,this inverted U-shaped effect is only statistically significant in firms that implement forward-looking environmental strategies.Third,I find that central environmental supervision and managerial stock ownership intensify the inverted U-shaped relationship between local environmental enforcement and corporate green investment efficiency,while public environmental awareness and corporate financial performance attenuate this relationship.Additionally,I document that there exists a U-shaped relationship between local environmental enforcement and excessive green investments.These findings have implications for policymakers and indicate that local governments should optimize corporate green investment efficiency through differentiated environmental regulation.Chapter 6 turns to the impression management of corporate green investment efficiency from the perspective of environmental disclosure.This chapter mainly conducts the ordered logit regression to examine the relationship between green investment efficiency of polluting firms and corporate environmental disclosure.The results show that corporate green investment efficiency is significantly negatively associated with environmental disclosure,which indicates that there exists impression management in polluting firms' environmental disclosure.To be specific,polluting enterprises can obtain a good impression of information users by improving the information transparency of pollutant emissions,thus establishing a green image and environmental reputation.Notably,the negative relation between corporate green investment efficiency and environmental disclosure is only statistically significant in non-state-owned enterprises.Further,I find that this relation is significantly more negative for firms with higher media attention,higher proportions of managers' stock ownership,and higher corporate value.The findings of this chapter suggest that the local governments should not only rely on the corporate environmental disclosure,but also monitor the real behavior of firms when evaluating the green performance of polluting enterprises.Chapter 7 offers suggestions to enhance corporate green investment efficiency.This chapter proposes countermeasures to improve the efficiency of corporate green investments from the perspective of enterprises,governments,and other stakeholders.For enterprises,it is necessary to re-establish their values,reform the green management and optimize the allocation of resources.For the government,it should actively promote the construction of ecological civilization driven by green investment efficiency,maintain the normalization of central environmental supervision,strengthen differentiated environmental regulation,guide polluting firms to implement forward-looking environmental strategy,and build a modern environmental multi-governance system.For other stakeholders,public environmental organizations should be deeply involved in environmental supervision,and the media and the public can play a supervisory role.Chapter 8 concludes.This chapter summarizes the main conclusions of this dissertation,and cautions some limitations of the study.Finally,possible future research directions are discussed.The innovation of this dissertation includes:First,Data Envelopment Analysis is used to quantify the firm-level green investment efficiency.DEA is a nonparametric method for measuring the efficiency of peer decision-making units with multiple inputs and outputs.This method is appropriate to associate different types of green investments with varieties of pollutant emissions,and is able to overcome the interference of the subjective factors that traditional performance evaluation methods suffer when setting weights and avoid possible bias or errors in the model specification,which suggests that DEA can measure corporate green investment efficiency more objectively.Second,this paper examines the association between local environmental regulation and corporate green investment efficiency from the perspective of enforcement.The government's environmental supervision requires not only impeccable environmental legislation and sound environmental system,but also the strict enforcement of local governments.Even though the environmental policies are designed scientifically and delicately,they will be useless if they are not implemented thoroughly.Studying the impact of local environmental enforcement on corporate green investment efficiency is closer to reality and deepens the research on environmental regulation and micro-enterprise behavior.Third,based on the theory of impression management,this paper explores how enterprises can manage their behavior of pollution prevention and control in environmental disclosure.Corporate environmental disclosure is a way for polluting firms to conduct impression management,but it is not easy to be detected.Combined with the new requirements of the China Securities Regulatory Commission on the environmental disclosure by listed companies,this study tests the relationship between corporate green investment efficiency and environmental disclosure to reveal the motivation and strategy of impression management in corporate environmental governance,and thus can expand the research on impression management at the micro-enterprise level.This dissertation provides several contributions:First,this dissertation extends the research on the economic consequences of corporate green investments.Previous literature focuses almost exclusively on green investments.Nevertheless,I quantify firm-level green investment efficiency with SBM-DEA approach and provide the initial evidence,which suggests the main problem of low-efficiency firms is that managers ignore the efficient allocation and value-creating use of resources in terms of reducing pollutant emissions.My findings indicate the specific improvement direction for the managers to achieve a balance between financial and non-financial management and enhance the green competitiveness of the enterprise.Second,this dissertation enriches the research perspective of corporate social responsibility theory,stakeholder theory and impression management theory.Remarkably,my study contributes to CSR literature by dealing with the integration of environmental performance into corporate green investment decisions from the perspective of efficiency.The environment is a significant element of CSR,which means my research should be based on stakeholder theory.My study adds value to this strand of literature in that I show an effective way to help resolve the conflict of interests between shareholders and non-shareholder stakeholders,which is optimizing corporate green investment efficiency.In addition,by verifying the existence of impression management in polluting firms' environmental disclosure,stakeholders can more effectively identify the firms' environmental information and make better decisions,which also extends the impression management literature.Third,the conclusions of this dissertation provide useful empirical evidence for pursuing the path of environmental regulatory reform to a greater depth and width.I shed new light on how the local environmental enforcement affects green investment efficiency of polluting firms,which helps regulators to adjust the focus,measures,and intensity of supervision more specifically,and optimize the corporate efficiency of green investments by implementing differentiated environmental regulation.Meanwhile,the findings on the existence of impression management in corporate environmental disclosure also offer a basis for the regulatory authorities to formulate more effective environmental disclosure systems and policies. |
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