Government Subsidies, Product Market Competition And Internalization Of Corporate Environmental Costs

Since 2010,the environmental pollution problems brought about by the development of heavy industry in China for many years have been concentrated and erupted.Many areas has been in mild pollution for a long time.So as to resolve the even more severe environmental pollution problem,the government encourages enterprises to actively increase environmental protection investment,to promote the internalization of environmental costs through incentives.The government provides various forms of environmental subsidies to enterprises,such as reducing the financing costs of purchasing environmentally friendly equipment,and rewarding companies that have made outstanding contributions to environmental protection.However,the effect of government policies remains to be tested.Can government subsidies for environmental protection guide enterprises to change their investment direction,to expand the scale of environmental protection investment,and to promote the internalization of environmental costs? In the case of different industry competitions,the resource constraints imposed by enterprises are different.What is the role of government subsidies in environmental protection in the internalization of corporate environmental costs?To research the above problems,a combination of literature analysis and empirical research is used.This paper takes the listed companies in the A-share heavy polluting industry from 2010 to 2015 as the research object,and explores the factors affecting the internalization of corporate environmental costs.Firstly,by reading the research literature the paper reviews and summarizes the literature on government subsidies,product market competition and internalization of environmental costs.And then reviews and summarizes the relevant theoretical foundations.Basing on the theoretical basis,this paper analyzes the impact of government subsidies and product market competition on the internalization of corporate environmental costs,and the adjustment of product market competition on the relationship between government subsidies and the internalization of corporate environmental costs.Basing on this,the research hypothesis is put forward.Then designing regression model by selecting variables,and analyzing the data in the model through mathematical statistics and empirical analysis,and testing the robustness of the model.Finally,the research conclusions are drawn based on the analysis of the empirical results,and relevant policy recommendations are put forward,and suggestions for future research directions that can provide reference to the academic work are proposed.Through the research,it is found that the level of corporate environmental disclosure in China is relatively low.The number of enterprises that discloses environmental information is small,and the information disclosure guidelines are different,and the randomness of disclosure is more serious,which makes the collection of environmental data more difficult.The government subsidies for environmental protection can alleviate the tight resources of enterprises,and make up for the increased environmental costs of enterprises,and increase the enthusiasm of environmental protection investment,and promote the internalization of environmental costs.Product market competition has a regulating effect on the incentive effect of government subsidies.Government incentives are more stimulating in highly competitive heavily polluting companies.Basing on this,the regulatory authorities should take measures to urge enterprises to adopt uniform disclosure guidelines and proactively disclose environmental information.The government should provide reasonable financial support for the environmental protection of heavily polluting enterprises,and subsidies should be biased towards more competitive industries.