Government Environmental Audit,Environmental Governance And Green Economic Growth

Since economic reform and opening up,China’s economy has maintained a trend of rapid growth,which creates a world miracle.At present,China has become the world’s second largest economy.However,the ecological damage and environmental pollution caused by the traditional economic growth model of high consumption,high emission and high pollution become increasingly serious.The frequent environmental pollution incidents have seriously affected people’s healthy life and industrial production,and environmental pollution has attracted high attention of the whole society.As people’s demand for better living environment increasing,strengthening environmental governance to improve environmental quality and the level of of green economy development becomes important content of the public accountability of governments.In 2007,it was pointed out in the report of the 17 th CPC National Congress that building ecological civilization was one of the new requirements for China to achieve the goal of building a well-off society in an all-round way.In 2017,the report of the 19 th CPC National Congress pointed out that “beautiful China” was the grand goal of ecological civilization constrution.In 2021,China puts forwad the goals of “carbon peak” and “carbon neutralization”.All of these reports show that environmental governance has increasingly become an important part of state governance.The goal of state governance determines the direction of the state audit.The government environmental audit（GEA,hereafter）,an important supervision mechanism of environmental governance,has the characteristics of supervising enterprise and government.Its essential goal is to promote governments and corportations to fulfill public environmental accountability comprehensivly and effectively.Since2008,the National Audit Office and audit institutions at all levels have carried out a variety of environmental audit activities.So,what kind of environmental governance effect does the GEA play? There is by far a lot of listerature about GEA,but they don’t systematically and deeply study the theoretical basis how and why GEA promote environmental governance,and there is still much room to explore.What’s more,the related empirical research is so scarce,and few scholars provide direct empirical evidences on the effect of GEA on environmental governance.Whereas,a theorical framework including theoretical bases,reality bases,influence machanism,functional orientation and action path is built in this paper to analyse the role of GEA in environmental governance.Based on the theoretical analyses,this study empirically tests the effects of GEA on environmental governance from the perspectives of corporate environmental governance,Regional Environmental Quality（REQ,thereafter）and Green Economic Growth（GEG,thereafter）.This study aims to provide theoretical bases and empirical evidences on the effect of GEA on environmental governance,and to provide policy enlightenment for improving China’s GEA system and the supervision machanism of state environmental governance.This dissertation is arranged as follows:Chapter 1 is the introduction,including research background,significance,purpose,content,ideas,methods,innovations and contributions of this paper.Chapter 2 is the system background and literature review,including introducing the evolution of China’s GEA system and contents and characteristics of GEA activities,and summarizing and making comments on the existed related domestic and foreign literature,and finally puting forward the difference on this study.Chapter 3 is the theoretical framework to explain why and how GEA promotes environmental governance.This chapter builds a theoretical framework to explain why and how GEA promotes environmental governance through analyzing the theoretical bases,reality bases,functional orientation,influence mechanism and action path of GEA in promoting environmental governance.Chapter 4 is the empirical study on the relationship between GEA and Corporate Environmental Investment（CEI,thereafter）.Based on the sample of A-share listed companies,this chapter empirically tests the relationship between GEA and the level of CEI,which provides empirical evidences on the micro-effect of GEA on environment governance.Chapter 5 is the empirical research on the relationship between GEA and REQ improvment.Chapter 6 is the empirical research on the relationship between GEA and GEG.Based on the sample of panel data from Chinese prefectural-level cities,these chapters tests the relationship between GEA and REQ,and the relatioship between GEA and GEG,which which provides empirical evidences on the macro-effect of GEA on environment governance.Chapter 7 is the conclusion of this study.The main research conclusions are summarized,and targeted policy suggestions are proposed.The research limitation and possible future research expectations are also summarized in this chapter.Some conclusions of this dissertation can be summarized as follows:（1）As an important supervision mechanism of state environmental governance,the effect of GEA on environmental governance not only has profound theoretical foundations,but also has reality bases,such as organization about GEA,the related laws and regulations and international practical experience of GEA.GEA plays an important role in state environmental governance by promoting the level of CEI,improving REQ and GEG.（2）At the micro level,GEA has significantly promoted corporate environmental governance.Corporations are not only the main producers of environmental pollution,but also the main supervision objects of local governments to strengthen environmental governance.On one hand,the environmental auditing activites conducted by governmental auditing organizations can bring direct deterrent effect and supervision effect on corporate environmental legitimacy,which will augment environmental protection pressure on corporations to increase environmental investments.On the other hand,the environmental auditing activites conducted by governmental auditing organizations will increase environmental protection pressure on local governments.As main supervision objects of local governments to strengthen environmental governance,corporations will increase environmental protetction investments to meet governmental requirements on environmental protection.Thus,GEA have direct and indirect enfluences on CEI.Based on the sample of A-share listed companies from 2008 to 2018,this dissertation empirically tests micro-effect of GEA on environmental governance.The empirical results show that there is a significant positive relationship between GEA and the level of CEI,and GEA significantly boosts the level of CEI,and the above association is more pronounced when the level of government audit institution is higher and the legal environment in the provincial area is better.Further analysis reveals that the positive effect of GEA on improving CEI is more significant in firms with larger size,non-state-owned ownership（non-SOEs）,government environmental subsidies,higher financial constraint and higher tax burden,in the heavy-pollution industries,and in the provinces with greater pressure on environmental protection.（3）At the macro level,GEA significantly improves REQ and GEG.Local governments are important trustees of national environmental governance.“Blue waters and green mountains are indeed gold and silver mountains” has become local officals’ concept of econonmic development,and improving environmental quality also becomes important content of local governments’ public accountability.Through supervising and inspecting environmental financial funds,environmental performance and implementation of environmental policies,GEA helps to optimize environmental resources allocation,helps to effectively implement environmental policies,and helps to strengthen local governments’ environmental protection responsibility and concept of green development,which will encourage local governments to boast regional economic development through efficiency improvement,institutional innovation,organizational reform and green technological progress.Based on panel data sample of Chinese prefecture-level cities from 2008 to2017,this dissertation empirically tests the effect of GEA on REQ.The empirical results show that there is a significant positive relationship between GEA and REQ,which indicates that GEA significantly improves REQ.The positive effect of GEA on REQ improvement is more significant in the regions with higher promotion pressure on local offcials,better legal environment and higher Pollution Information Transparency Index,and in the national environmental protection exemplary cites.And GEA significantly improves REQ through increasing the level of environmental provtection expenditure and environmental governance efficiency.Based on panel data sample of Chinese prefecture-level cities from 2008 to2016,this dissertation empirically tests the effect of GEA on GEG measured by the total factor productivity--Malmqusit Index.The empirical results show that GEA significantly promots regional GEG and the green technology innovation is the mediate mechanism in the relationship of them.In terms of specific action path,the GEA significantly promotes regional GEG by improving the level of regional green technology innovation,optimizing regional industrial structure,improving regional foreign trade openness and financial development.Above research findings provide empirical evidences on macro-effect of GEA on environmental governance.The contributions of this dissertation mainly reflected as follows:（1）In terms of research content,this paper builds a theoretical framework to analyze the effects of GEA on environmental governance,including theoretical bases,practical bases,functional orientation,and influence mechanism and action path,which provides strong theretical bases for GEA to promote environmental governance and GEG.This paper systematically and empirically tests effects of GEA on environmental governance from micro to macro perspective.It is found that GEA not only significantly promoted corporate environmental investment,but also significantly promoted regional environmental quality improvement and regional green economic growth.These findings provide important empirical evidences on the effects of GEA on environmental governance.（2）In terms of research method,this paper expands the research paradigm from micro to macro.Firstly,based on the sample of China’s A-share listed companies,this paper empirically tests the micro-effect of GEA on CEI improvement.Secondly,based on the sample of China’s prefecture-level cities data,this paper empirically tests the macro-effect of GEA on improving REQ,and tests the influence mechanism how GEA significantly promote REQ improvement from the perspective of the level of invironmental protection expenditure and the efficiency of invironmental governance.Finally,this paper empirically tests the macro-effect of GEA on GEG based on the sample of China’s prefecture-level cities data.This paper gradually tests the effect of GEA on environmental governance from micro to macro perspective,from the progress to the concequence of environmental governance,which helps to reveal the influence mechanism how GEA promote environmental governance.（3）In the background of China’s instituation,this paper systematically and deeply analyzes the important role of GEA in national environmental governance,the conclusions of this paper has strong effectiveness and application value.It is found in this paper that GEA plays positive role in promoting national environmental governance and GEG,which has great policy implications for China to promote ecological civilization construction and boast high-quality economic development.And this research also provides incremental evidence on the effect of GEA on global environmental governance and sustainable development.