Influence Of Senior Management Change On Enterprise Environmental Protection Investment

Since the reform and opening-up,with the rapid development of China’s economy,problems such as shortage of resources and environmental degradation have also emerged.As the main polluter of the environment and consumer of resources,the undertaking environmental responsibility of enterprises will attract more attention.Among them,the heavy pollution enterprises have a large demand for environmental governance and are considered as the key actors.But in real life,some enterprises have short-sighted mentality and negative response,even escape the responsibility of environmental protection.The construction of ecological civilization has created an excellent opportunity to promote the development of environmental accounting in China,and also provides a new perspective for the study of environmental investment.Environmental protection investment is a kind of environmental accounting application that can alleviate environmental pollution,is directly related to the cost and output of enterprises,and can be accurately identified and measured.The research from the perspective of environmental accounting has long-term benefits.In order to effectively implement the environmental plan,enterprises should actively strengthen environmental protection,and realize the "symbiosis" of economic and environmental benefits.At this time,how to drive enterprises to increase environmental protection investment has become a common topic.From the perspective of environmental accounting,most studies are based on the short-term static perspective to explore the impact factors of environmental investment,while the long-term dynamic perspective is rare.In the company,the senior managers are not only the core and soul of the enterprise,but also play an important role in the strategic change and decision-making.As an important personnel decision,the change of senior management will inevitably affect all aspects.There are few literature studies on the post change of senior managers from the perspective of environmental accounting,and few literature studies on the dynamic of senior managers,that is,whether the change of senior managers will affect the environmental protection investment of enterprises.Therefore,this thesis will explore the impact of executive change on corporate environmental protection investment.According to the management defense theory,if the successor executives who hold the "quick win" view will have short-sighted behavior under the short-term performance pressure,they have to reduce the environmental protection investment with a long return cycle.According to the theory of information asymmetry,if the degree of asymmetry increases after the change of senior management,leading to higher financing constraints for heavily polluting enterprises,the environmental protection investment will lack of operating funds.According to the social network theory and structural hole theory,if the shock brought by the change of senior management can destroy the stable environment required by the performance of the enterprise’s environmental protection responsibility,the enterprise will reduce the environmental protection investment and the long-term "symbiosis" benefits.This thesis will discuss the following questions:does the change of senior managers have an impact on the level of environmental protection investment?Through the external and internal regulatory mechanism of the enterprise,including environmental regulation and internal control,can it promote the senior managers to change the enterprise’s environmental protection investment to a certain extent?From the external point of view,environmental regulation is the primary external factor affecting the enterprise’s environmental protection investment decision-making.From the internal point of view,the internal control of the enterprise itself is the internal incentive and self punishment for the environmental responsibility.This thesis selects the listed companies with A-share heavy pollution in Shanghai and Shenzhen in 2007-2018 as a sample to study whether the change of senior management can have an impact on environmental protection investment,and whether environmental regulation and internal control can play a regulatory role in the relationship between the two.In the further analysis,the thesis studies the specific path of the impact of executive change on environmental protection investment,and makes a dynamic study of the relationship between the two.The empirical results show that:under the condition that other conditions remain unchanged,the change of senior managers has a significant negative impact on the environmental protection investment of enterprises.As a mechanism of external supervision and governance,environmental regulation can restrain the negative impact.As a mechanism of internal supervision and governance,internal control can also inhibit the negative impact.In the further analysis,it is confirmed that the improvement of the defense psychology of the successor executives and the aggravation of the environmental turbulence of the enterprise are the real factors that lead to the negative correlation.However,the increasing difficulty of corporate financing after the change of senior management has not been proved to be the key path.Two years later,three years later,the negative impact of the change of senior management in heavily polluted enterprises on environmental protection investment is not sustainable.On the one hand,the empirical results of this thesis are supplements to the influencing factors of enterprise environmental protection investment and corporate governance methods,expanding the research perspective of environmental accounting theory.On the other hand,the study of this thesis can provide suggestions for enterprises to improve the level of environmental protection investment,help companies attach importance to internal and external supervision and governance mechanisms,and strengthen the constraint mechanism of environmental accounting practice for management.