Environmental Information Regulation And Financing Constraints

Since the reform and opening up,China’s economy has developed rapidly and has made a qualitative leap.But at the same time,the destructive economic development method of "developing the economy at all costs" has also caused us to pay a painful price on economic and resource issues,which air pollution and Water pollution are the most serious problems.Under the increasingly severe environmental conditions,Communist Party and state leaders have deeply realized the importance of protecting the environment and resolutely abandon the practice of sacrificing the environment to develop the economy.In terms of environmental issues,the concept of environmental regulation is put forward,and the specific methods and means to realize environmental regulation are defined through environmental regulation tools.After more than 40 years of improvement and development,China’s environmental regulation tools include market incentives,command and control,public participation,and information regulation and other tools.Among them,information regulation can be divided into mandatory disclosure of environmental information,which can also be named environmental information regulation and voluntary disclosure.After the amendments to the Environmental Protection Law of the People’s Republic of China in 2015,companies were forced to disclose environmental information in their annual reports,and a mandatory environmental information disclosure system has been established.Since then,the government’s requirements for environmental information disclosure have changed from voluntary disclosure by enterprises to mandatory disclosure.The subject of disclosure has changed from companies with serious excess emissions to key pollutants,and environmental information regulation has also become a basic national policy of the country.Due to the imperfections and asymmetry of information in the capital market,75%of non-financial listed companies in my country are facing financing constraints.Financing constraints hinder the development of enterprises and are the important issues that companies need to overcome that affect their investment decisions and value realization.Therefore,for companies,corporate decision makers will try to ease the financing constraints of companies,among which corporate information disclosure has become an important way.Existing literature has conducted research on the voluntary disclosure of environmental information by enterprises,and found that voluntary disclosure by enterprises can significantly reduce the financing costs and financing constraints of enterprises.However,since the 2015 new "Environmental Protection Law" made mandatory requirements for information disclosure,how the mandatory information disclosure will affect corporate financing constraints is exactly what this article will explore and discuss.This article explains the necessity and rationality of environmental information regulation based on signal transmission theory,legality theory,and externality theory,and analyzes on this basis.After analyzing the different responses of companies with different information transparency,analyst attention,political relevance,and property rights to financing constraints after the implementation of environmental information regulation policies,five hypotheses in this article are put forward.In the empirical research part,the KZ index is selected as the proxy variable for financing constraints,and the mandatory disclosure requirements for environmental information after the amendment of the new environmental protection law in 2005 were used as a policy shock.The 2007～2018 Shanghai and Shenzhen A-share listings were selected.The 935 high-pollution enterprises in the company processed and analyzed the data based on the Double Differential Model(DID).The key pollutant emission units in the high-pollution industry are used as the treatment group,and the non-key pollutant units are the control group to study environmental information regulation and the relationship between financing constraints.The main conclusions obtained in this article are:(1)The implementation of environmental information regulation policies will exacerbate the financing constraints faced by high-polluting enterprises.(2)When a company’s information transparency is lower,analysts’attention is lower,and its political relevance to the government is lower,the problem of financing constraints is more severe;compared with state-owned enterprises,private companies’ financing constraints are also more severe serious.(3)Through a series of robustness tests such as the placebo test,changing the measurement method of the explained variable,and propensity score matching(PSM-DID),the empirical conclusions obtained in this paper are still valid.The innovations of this article are mainly reflected in the following aspects:(1)This article research the impact of environmental information regulation tools on enterprises,and expand the research on environmental regulation tools.(2)On the basis of previous research on voluntary environmental information disclosure by enterprises,this article study the impact on corporate financing constraints after requiring key pollutant discharge entities to compulsorily disclose environmental information through annual reports in 2015.(3)This article adopt the double difference model,with the key pollutant emission units in the high-polluting industries as the treatment group,and the non-key pollutants as the control group,to study the relationship between environmental information regulation and financing constraints.Provide a certain empirical basis and theoretical basis for relevant departments to carry out policy evaluation.