The Research On Investment Decision Of An Enterprise Under Environment Regulation

In recent years, because the enterprise does not take full account of environmental factors, when make investment decision,China’s environmental problems are getting worse. But with increasingly stringent environmental regulation, increasingly concerned about environmental protection, companies have to take full account of the environmental factors when make investment decisions. Therefore, this article will study the enterprise investment decision-making under environmental regulation, and put forward a number of proposals to guide enterprise investment decision-making.This article firstly combed the literature that is related to environmental regulation and corporate investment decisions. On the basis of literature research, This article summarized the theory of the enterprise investment decision-making under environmental regulation. Based on these, reference to Larry and Jiangfeng (2001) research methods, we respectively establish the enterprise investment decision-making model under no environmental regulation, environmental tax regulation, tradable permits regulation, subsidies to reduce emissions regulation and combination of environmental regulation tools, and used MATLAB to simulatemodel. The conclusion is that the stronger the intensity of environmental regulation, the higher the level of enterprise investment. On the basis of the conclusion,we proposed four hypothesis. We use composite indicator to measure environmental regulation intensity, use837sample data to study hypothesis. In model1, we use corporate investment level as a variable, the environmental regulation intensity as explanatory variables. The empirical conclusion is the stronger the intensity of environmental regulation, the higher the level of enterprise investment. In model2, the level of technological innovation is as explained variable, the environmental regulation intensity as explanatory variables. The empirical conclusion is the stronger the intensity of environmental regulation, the higher the level of enterprise technology innovation. In model3, the level of technological innovation is as explained variable, government subsidies as explanatory variables. The empirical conclusion is the higher the level of government subsidies, the higher the level of enterprise technology innovation. In model4, the level of enterprise production equipment investment is as explained variables, the environmental regulation intensity as explanatory variables. The empirical conclusion is the stronger the intensity of environmental regulation, the less enterprise production equipment investment, but it didn’t pass the significance level test.Finally, according to the previous research and analysis, this paper put forward relevant counter-measures from three aspects of the environmental regulation system construction, environmental oversight mechanisms, environmental awareness.