Study On The Influence Of Environmental Law Regulation On Debt Financing Of Heavily Polluting Enterprises

In recent years,the environmental damage caused by economic development has made the contradictions between the two more prominent.Countries have continuously adjusted and strengthened the environmental regulation policies to ease the conflict between the two,the purpose is to achieve efficient and environmentally friendly green economic growth.China’s extensive use of resources since the reform and opening up has brought power to the rapid development of the economy,but the cost of environmental pollution has gradually emerged,beginning to counteract the society,affecting people’s lifestyles and threatening the continued growth of the economy.In order to coordinate the relationship between the two,the Chinese government has formulated environmental regulation policies in response to changes in environmental protection needs,and deployed environmental protection work from all sides.Especially since 2015,with the implementation of the new environmental protection law,China’s restriction on heavily polluting enterprises has been increasingly strengthened.Since debt financing is closely related to the survival and development of enterprises,can environmental legal regulation play a role in influencing the debt financing of heavily polluting enterprises in China? This is the main problem to be solved in this thesis.This paper firstly sorts out the existing literature related to environmental legal regulation,corporate behavior and debt financing.Then,this paper analyzes the mechanism effect of environmental legal regulation on corporate debt financing from the perspective of enterprise’s own financing needs and commercial bank motives,and how environmental legal regulation affects the debt financing of heavily polluting enterprises under the four mechanisms of corporate performance,environmental information disclosure,banking environmental risk management and bank green reputation.Based on the analysis of the theoretical mechanism,this paper selects the micro-level enterprise panel data from 2010 to 2017,and empirically analyzes the impact of environmental legal regulation on heavily polluting enterprises.In the regression model,this paper uses the implementation of the new version of the Environmental Law to represent the impact of environmental legal regulation,and sets up a virtual variable.Taking the debt financing ability of heavily polluting enterprises as explanatory variables,this paper introduces the cross-item between the implementation of the new version of the Environmental Protection Law and the industry group,the cross-term of the implementation of the environmental legal regulation and the industry was introduced,and empirically tests the impact of environmental legal regulation on debt financing ability of heavily polluting enterprises through the DID model.The main conclusion is that the new version of "Environmental Protection Law" as a natural shock event of environmental law regulation has not found that it has a negative impact on the debt financing ability of heavily polluting enterprises.The possible reasons are: 1.This paper selects the listing company as a research object,the listing company’s environmental information disclosure and social responsibility requirements are more stringent,forcing listing companies to regulate their own pollution discharge behavior,thus ensuring legality and being less affected by legal regulation;2.There is no uniform standard for accounting information disclosure,which leads to the non-comparability of information,which affects the quantification of environmental risks by commercial banks and the changes in loan pricing rules.3.The environmental legal system does not impose mandatory restrictions on commercial banks.In the test of the mechanism of the performance of the company’s performance and environmental information disclosure as the explanatory variables,it is found that environmental legal regulation does not threaten the financial performance of the enterprise and is beneficial to the environment.The improvement of the quality of information disclosure has reduced the incentives for commercial banks to restrict their financing.Finally,according to the analysis of the mechanism and empirical results,the corresponding policy recommendations are put forward from the perspective of the state,banks and enterprises,in order to realize the important role of financial instruments in environmental legal regulation,and contribute to the realization of green economy.