Environment Management System Certification And Environment Investment

Because environmental resources are public goods,and environmental management benefits are unstable and long-term,companies are often unable to protection and governance environment.In order to prevent the environment from being further damaged,the International Organization for Standardization(ISO)has promulgated a series of environmental management system standards(ISO 14000),in the hope of standardizing the environmental management process of the certification organization.The number of organizations that have passed ISO 14001 certification has increased year by year,and the ISO 14001 certification is increasingly important in the international or domestic market.Under the background of advocating green environmental protection,energy conservation and emission reduction,the company that has passed the environmental management system certification has obtained the “green image”.The public's trust in the certification enterprise has gradually increased.However,a series of environmental emergencies exposed by Zijin Mining and Jiuzhitang made us wonder: Is environmental management system certification a true green practice,or is it another attempt?In this paper,all listed heavily polluting companies in Shanghai and Shenzhen A stock market during 2008-2016 are selected as the research objects.The treatment group consists of all firms that have passed the environmental management system certification,while the control group consists of successfully matched firms in the method of PSM with uncertified firms in the same year.The final sample consists of 287 pair of firm-years.Based on the above sample and the method of DID,the paper first examined the changes of environmental protection investment levels after environmental management system certification.Secondly,to distinguish between capitalization and expense-based environmental protection investment,examined which type of environmental protection investment decrease more significant.A series of robust tests were carried out on the above assumptions.In the further analysis,the paper examined the impact of product market competition,financing constraints and equity concentration on environmental investment changes after environmental management system certification.Based on evidences from empirical analysis,I find that:(1)after the environmental management system certification,listed companies will indeed reduce the level of environmental protection investment;(2)Compared with the expense-based environmental protection investment,the company's capitalized environmental protection investment has been reduced after the environmental management system certification;(3)Compared with monopolistic industries,in the highly competitive product market,corporate environmental protection investment has been decreased after environmental management system certification,of which capitalized environmental protection investment has been decreased more than expense-based environmental protection investment;(4)Compared with enterprises with lower financing constraints,enterprises with high financing constraints have less environmental protection funds after they passed the environmental management system certification.Among them,the capitalized environmental protection funds invested are less than the expense-based environmental protection funds;(5)In China's special corporate governance environment,compared with enterprises with high concentration of equity,listed companies with low concentration of equity has decreased environmental protection investment after environmental management system certification.Among them,capitalized environmental protection investment has been decreased more than expense-based environmental protection investment.The paper focused on the environmental management system,a global standard certification,emphasized the impact of ISO 14001 certification on listed companies' environmental investment,which contributes to both the research on the internal spillover effects of environmental management system certification and the factors affecting environmental investment.In addition,the research findings of this paper have a strong reference value for management to improve environmental management,the government and its regulatory agencies to improve the environmental laws and regulations and regulatory processes,and other stakeholders to participate in public supervision.