The Impact Of Environmental Regulation On Chinese Enterprises' Profitability

For a long time,environmental regulation has adopted the terminal governance mode,which is prone to the problems of high operation cost and pollution transfer.The implementation of cleaner production audit turns terminal governance into process control,which is a major change in environmental regulation strategy.Since 2004,the Ministry of Environmental Protection has launched cleaner production at the enterprise level and issued a list of cleaner production audit enterprises.By 2012,more than 17000 enterprises participated in the "Cleaner Production Audit".Cleaner production audit with expanding scope has become an important basis for analyzing the potential of cleaner production and assessing the effectiveness of cleaner production.The influence of environmental regulation on the profitability of micro enterprises is a controversial issue in the theoretical circle.As an important process controlled environmental regulation policy in China,"Cleaner Production Audit" can promote the promotion of its profitability while reducing the energy saving and emission reduction of clean production enterprises.Based on the basis of the analysis of the theoretical mechanism of the impact of cleaner production audit on the profitability of enterprises,this paper uses the list of cleaner production audit enterprises from 2004 to 2012 and the matching data of China's industrial enterprise database from 2003 to 2013,and uses the difference-in-differences method to estimate the impact of clean production audit on the profitability of enterprises.The regression results are further tested and theoretical tests are conducted.The study found that the clean production audit can significantly improve the profitability of the enterprise.This promotion effect presents a U change.The turning point of the cleaner production audit to the enterprise's profitability is roughly fifth years after the enterprise participating in the policy;Enterprises who voluntarily participate in the cleaner production audit have only been promoted in a short period of time,while the enterprises that have been forced to participate have improved their profitability for a long time;The profit ability of the enterprises with their own audit is significantly greater than those of non self conducting audits;The profitability of enterprises with different ownership types is significantly different,the profitability of foreign enterprises has been significantly improved,but the profitability of private enterprises has declined;The cleaner production audit has the most obvious effect on enhancing the profitability of the technology intensive enterprises,the weakest promotion to the labor intensive enterprises,but all shows a significant promotion effect;Enterprises belonging to the clean industry have improved their profitability after the implementation of the cleaner production audit,and the profit ability of the enterprises in the pollution intensive industry is not obvious;The test of the impact mechanism shows that the profitability of the enterprise after the implementation of the cleaner production audit is due to the innovation effect,not the increase of the enterprise subsidy,and the non enterprise compliance cost heterogeneity.