Political Connection And Environmental Pollution Behavior

The problem of environmental pollution,accompanied by the rapid development of China's economy,produces serious risks and has been more and more widespread concern.On one hand,environmental pollution is part of corporate behavior actually.However,the company is claimed to pay for the protection measures in exchange for the future benefits.On the other hand,since regulatory intensity have an impact on environmental contamination,the company with connections will give rise to environmental pollution problems because of collusion with the government.Based on this,this paper mainly studies the relationship between corporate political connections,cost of environmental pollution and corporate governance.We use the combination method of theoretical analysis and empirical research,hoping to solve the following problems:1.what is the relationship between political connections and the corporate environmental pollution;2.whether connected firms would receive more fines;3.After the sample is subdivided into the state-owned enterprises and non-state-owned enterprises,what changes will happen to the research conclusion?Through the research,it is shown that:(1)The company's political connections will increase the possibility of corporate environmental pollution,thereby increasing the social cost of environmental pollution.This phenomenon also exists in the sample of state-owned enterprises,and the non-state-owned enterprises sample is not significant.(2)We further research on the relationship between corporate political connections and environmental fines,found that companies with political connections are more likely to violate the law and be fined.After comparing with the reduction of environmental pollution costs and the use of political links to reduce corporate fines,the connected corporates still tend to take illegal actions and accept the fines,which to a certain extent can indicate that China's current fines on environmental pollution are insufficient.(3)The political connections as well as the current and past environmental fines will significantly reduce the growth rate of return and profits of the enterprises.The environmental penalties will directly and indirectly reduce corporate performance through information disclosure effects.This phenomenon serves as a warning to corporate governance--the establishment of a political connections and the environmental pollution behavior may not be conducive to the development of enterprises fundamentally.