The Relationship Between The Strenth Of Internalize External Environmental Costs And Business Performance-an Observation Based On The Observation Of Environmental Information Disclosure

The environment’s public nature determines its external externality. The existence of externalities makes increasingly serious environmental pollution problems.Our living environment surrounded by garbage.But our companies do not realize the importance of environmental protection. Business owners just focus their attention on short-term profits that they can be achieved now. But, With China’s economic development,Our environmental problems have gradually been attracted people’s attention.Companies are required to fulfill a higher environmental responsibility.Business owners start thinking about environmental issues. The Important way to solve the problem of environmental pollution should transformed environmental externalities into the enterprise.The different of the enterprises operating conditions which led them attitudes are different to the internalize external costs for environmental. There are two different opinions.Some enterprises think that internalize external environmental costs will easily lead to an increase in operating costs which may reduce the company’s financial performance; But others think that Internalize external environmental costs will conducive to long-term development of enterprises which may improve financial performance.For these two different views, this paper first describes the research background, purpose and idea and then reviews the internalize external environmental costs and corporate performance literature review. Secondly,Combing the theoretical basis that mainly contains:the Externality theory、the Property rights theory、the Stakeholder Theory and the Sustainable development theory. On the basis these theories,we can analysis the relationship between environmental internalize external costs and Corporate Performance. And then we put forward the article research hypothes.According to corporate disclosure of environmental information, we can build the Strength Index of Internalize external environmental costs. We also select the Return on total assets (ROA)to measure of corporate performance.Finally, In this paper,we use the the empirical analysis to find the relationship between the strenth of internalize external environmental costs and business performance.Through theoretical analysis and empirical analysis,we can find that the strength of State-owned holding enterprises is higher than the Non-state-owned enterprises;There is a certain correlation between the external environmental cost internalization strength and the Enterprise Performance;The quality of corporate financial performance early will have an impact on the external environmental cost internalization strength; Enterprises enhance the strength of the internalization of external environmental costs not only conducive to improve the current financial performance,but also can promote future financial performance during the period. The results of this study will guide enterprises to be more positive investment environment to internalize external costs which can promote the harmonious development of enterprises and society.