Research On The Influence Of Financial Structure On Firms’ Emission-reduction Investment

After the reform and opening-up, with the rapid growth of the national economy andpeople’s life, the environmental pollution problems of China have become increasinglyserious. Among them, the air pollution is more often caused extensive concern of thewhole society. The thermal power industry as part of China’s national economy, plays animportant role in China’s economic and social development and people’s life, however,it is serious damaging to our environment, causing great losses to the national economy,harming greatly to people’s life and production activities.In order to solve the pollution problem as soon as possible, construct the resourceconserving and environment friendly society, and realize the sustainable development ofour national economy, the Chinese government must promote the enterprises to increasethe emission-reduction investment. The increasing emission-reduction investment is themain way to solve the problem of environment pollution in China. In view of the importantsignificance of the emission-reduction investment, this paper discuss the effect ofFinancial Structure on the emission-reduction investment.Financial Structure is the organic composition of different sources of capital and theproportion of various funds in the total financing. Different capital structure has differentcost. When the cost is high, and account for the large proportion, the enterprise mayselect higher economic benefits of the project, which is not conducive to theemission-reduction investment. Through the theoretical and empirical research, this papertries to find out the positive factors of financing structure on the emission-reductioninvestment, in order to promote China’s Firms to increase investment and provide atheoretical basis for emission reduction.Based on the capital structure theory, the financing constraints theory, the stakeholdertheory and the social responsibility theory as the theoretical basis, this paper select the37thermal power firms listed on the Shanghai and Shenzhen Stock Exchange from2000to2012years as the sample. Based on the research results of domestic and foreign scholarsabout the financial structure and the emission-reduction investment, this paper raise theempirical hypothesis, go in for the correlation analysis and regression analysis. Theempirical results show that there is a negative correlation between the emission-reductioninvestment and the debt financing of thermal power enterprise in China firstly. It is say thatthe thermal power enterprise’s debt level is high, is not conducive to the increase of the ejection-decreasing investment. And there is a positive correlation of theemission-reduction investment and equity financing of the thermal power enterprises inChina secondly. It is say that the financing level of the thermal power enterprise equity ishigher, more conducive to increase the emission-reduction investment. As a result, In orderto improve the emission-reduction investment expenditure, the firms should optimize thefinancing structure, reduce the proportion of debt financing, and improve the equityfinancing proportion. The Chinese government needs to accelerate the improvement of theconstruction of capital market, enhance our country’s capital market financing ability,broad the firms’ financing channels, and reduce the firms’ dependence on the debtfinancing.