Research On Environmental Regulations, Social Responsibility And Firms’ Environmental Protection Investment

In recent years, with the rapid development of China’s economy, environmentalproblems have become increasingly prominent. In order to achieve sustainabledevelopment win-win goal of socio-economic development and environmentalprotection, the government has formulated and implemented mandatory environmentalregulations and policies, and companies have begun to take the initiative to fulfill theirsocial responsibility to undertake environmental obligations, which have a significantimpact on business investment in environmental protection. Study on how governmentenvironmental regulation and corporate social responsibility affect the company’senvironmental investment behavior has great theoretical and practical significance inenriching and deepening the research of the corporate investment theory, in addition tooptimizing investment structure and the rational allocation of corporate environmentalfunds.First, this paper has reviewed the domestic and foreign relevant literature about theenvironmental regulation, social responsibility and corporate environmental investment.Based on this, this paper puts the government environmental regulation and corporatesocial responsibility into the same frame to make research on corporate environmentalinvestment, and embodies the characteristics of passive and initiative corporateenvironmental investment. Second, the paper applies the pollution heaven hypothesis,Porter hypothesis and endowment hypothesis to make theoretical analysis of how theenvironmental regulations have an impact on corporate environmental investment, andit also uses the stakeholder theory, the enterprise value theory and enterpriseresource-based view to make theoretical analysis of social duty to fulfill the impact oncorporate investment in environmental protection, and then proposes the appropriatehypothesis to be tested. Further, this paper selects36listed companies in heavilypolluting industries2011-2013data, and establishes the multivariate statisticalregression model to test hypotheses. The empirical results show that our seriouspolluting enterprises are inadequate in environmental protection investment, and mostcorporate environmental investment is a passive behavior under the government policyof mandatory environmental regulation. With the gradual strengthening of governmentenvironmental regulation, environmental investment scale enterprises show a first reduced, and then gradual increase to reach a critical value, indicating the "U-type"feature of the relationship between government environmental regulation strength andcorporate environmental investment scale. Corporate social duty conditions andcorporate environmental investment scale have a positive correlation, manifesting thatcorporate social responsibility has to fulfill its role in promoting environmentalinvestments. Finally, based on empirical findings, from the three aspects of governmentlegislation, corporate investment decisions and market surveillance, this paper proposespolicy recommendations about optimizing investment in environmental protection,including the government should improve the legal system of environmental policy,enterprises should increase investment in environmental protection, and the marketshould strengthen the supervision mechanism.