Study On The Impact Of Environmental Regulations On The Survival Status Of Polluting Enterprises

In recent years,while China’s economy is developing rapidly,the problem of environmental pollution is becoming more and more serious.As the intensity of environmental regulations continues to increase,the living conditions of polluting companies have received more and more attention.Pricewaterhouse Coopers had released the “ Report on Long-term Incentives for Chinese Enterprises in 2011” in 2012.The report showed that the average life cycle of Chinese SMEs and group companies was only 2.5 years and 7-8 years,while that of Japanese companies and European and American companies can reach 30-40 years.Obviously,the survival status of Chinese companies is not objective.Does environmental regulation further increase the survival risks of Chinese companies? It is very important to study the impact of environmental regulation on the survival risk of polluting enterprises in China,which promote the transformation of China’s economic structure and achieve high-quality green development.The survival analysis model originated in the field of biology,and has been widely used by domestic and foreign economists to study the survival of enterprises,such as studying the impact of enterprise size,innovation,exports,and external financing constraints on corporate survival;Environmental regulation on enterprises is also a hot topic for domestic and foreign scholars,but the existing literature mainly studies the relationship between them from a single perspective and draws different conclusions,such as total factor productivity,FDI,and employment.There are few research about all of them,and the survival path of polluting enterprises under the high pressure of environmental protection has not been paid enough attention.The main contribution of this article is to combine the database of China’s Industrial Enterprises and China Pollutant Emission Database from 1998 to 2007 as a research sample,and to study the following issues through the duration analysis method,supplementing the relevant theories on environmental regulation and corporate survival:(1)From the perspective of micro enterprises,we studied the effect of environmental regulation intensity which measured by removal rate(arithmetic average of removal rate of waste water and waste gas)on the survival status of polluting enterprises.(2)We investigated whether the survival path of polluting enterprises conforms to the "Porter Hypothesis",that is,environmental regulations force companies to improve their efficiency and thereby enhance their competitiveness,and re-verify the "Porter Hypothesis" from the perspective of corporate survival.The research results are as follows: The preliminary descriptive statistical analysis of the Kaplan-Meier distribution function,the PH model,and the more robust Cox model all show that the greater the intensity of environmental regulations,the lower the survival risk of polluting companies,and this conclusion passes the endogeneity test.When the robustness test extended the sample study time to 2010 and 2019 respectively,the conclusion was still valid.At the same time,when the effects of wastewater and exhaust gas removal rates on the survival risk of the company were examined separately and there was only heavy industry,the results were still valid,showing that the conclusions were very robust.But the conclusion didn’t agree with general intuition.After further study,we found that polluting enterprises can reduce survival risk by improving production efficiency under the pressure of environmental regulation,and its survival path accords with "Porter hypothesis ".Generally speaking,those affected more serious by environmental regulations are the “small scattered mess” companies.The research objects in this article are all enterprises above the designated size.These enterprises have the ability to shift to green production methods under the pressure of environmental regulations,and their survival risks are also reduced.The research results in this article provide a scientific basis for the government to formulate a reasonable environmental regulatory policy in the future,and pollute companies to explore a better survival path under the high pressure of environmental protection.And they have important guiding significance to promote our country to realize the "win-win" between economic development and environmental protection.