Research On The Corporate Environmental Investment Effect Of Ecological Regulation

As China’s economy enters a new stage of development,improving environmental quality and promoting green transformation of economic and social development are important current tasks.Since 2016,the State Ministry of Environmental Protection has started to carry out environmental protection inspection inspections at the provincial level to regulate environmental protection by means of ecological accountability.This initiative is an important attempt in the field of ecological and environmental regulation in China.In fact,how well environmental policies and measures are implemented and how much environmental quality is improved is directly related to enterprises,depending on their ideas,perceptions and behaviors regarding environmental protection.Increased investment in environmental protection by enterprises is the most basic and fundamental step in environmental management,as well as an important reflection of their environmental protection philosophy.Therefore,it is necessary to explore the impact of the ecological regulatory system on firms’ environmental protection investment,and to place the central ecological environmental protection inspection system(hereafter referred to as the central environmental protection inspector)and firms’ environmental protection investment behavior in the same research scenario.In the current more severe ecological governance situation in China,it is of great theoretical significance and practical value to study the impact of the central environmental protection inspection system on corporate environmental investment.This paper addresses the impact of the ecological regulatory system on the environmental protection investment behavior of enterprises,based on a quasi-natural experiment of the central environmental protection inspectors,and provides insight into the intrinsic mechanism of the role of the central environmental protection inspectors on the environmental protection investment of enterprises,and analyzes the role played by the local government and the institutional environment in the process of policy implementation.Based on the theoretical analysis,a multi-period double difference model is used to test the impact of the central environmental protection inspectors on firms’ environmental protection investment.At the same time,we examine how the "government supervision" strategy works for firms,and examine the mediating role of governance pressure on local governments and the moderating role of the relationship between government and business and the competitive environment of local governments.In addition,the heterogeneous effects of the policy on state-owned and non-state-owned enterprises are examined by considering whether the policy effects differ depending on the nature of the enterprises’ property rights.The impact of the central environmental protection inspectors on the economic performance of enterprises is further discussed to verify the validity of the Porter hypothesis.The study shows that the scale of corporate environmental investment increases significantly after the arrival of the central environmental protection inspectors,and this finding holds after a series of robustness tests.This paper also finds that: central environmental protection inspectors can further influence firms’ environmental protection investment through the intermediary role of local government governance pressure,and the environmental governance strategy of "supervising enterprises" by"supervising government" is effective;the higher the degree of "pro The higher the degree of "pro" and "clear" government-business relations,the better the implementation of the central environmental protection inspector;government competition to attract external high-quality resources can enhance the impact of the central environmental protection inspector on enterprises,while government competition to pursue economic growth will weaken the effect of this policy.Further study finds that central environmental inspectors have a more significant effect on the increase of environmental investment in state-owned enterprises compared to nonstate-owned enterprises.In addition,central environmental inspectors can further improve firms’ economic performance by increasing the scale effect and innovation compensation effect of firms’ environmental investments.The research in this paper enriches the literature on environmental inspectors and their effects,and provides useful insights for the government to further improve the ecological regulatory system.