Executive External Pay Gap,external Governance Environment And Corporate Environmental Investment ——Based On Empirical Evidence Of Listed Companies In Heavily Polluting Industries

China’s economy and society are moving towards a stage of high-quality development.The concept of green development is an important foundation for promoting ecological progress and consolidating high-quality development.But in recent years,the problem of ecological imbalance and environmental pollution has become more and more serious.As one of the main consumers of natural resources,enterprises should shoulder social responsibility and fulfill the responsibility of environmental prevention and control.Environmental investment is the specific performance of enterprises’ environmental governance behavior,which is characterized by strong external economy and long return cycle,and is easily regarded as a burden by the management.Existing studies on its influencing factors mainly focus on environmental regulation,government subsidies,public concern and other external factors,and few studies on the impact of management on corporate environmental investment.The subjective will of management is often the internal driving force of environmental protection management.A perfect compensation incentive mechanism is of great significance for guiding senior executives to pay attention to environmental protection investment with comprehensive benefits.At the same time,the pay gap is an important content in the design of the salary structure.The size of the external pay gap between senior executives and other executives in the industry will affect and change the psychological expectations and behavioral decisions of senior executives,thus producing different effects on the development of enterprises.In addition,the complexity of external governance environment will also bring a certain impact on enterprises and managers.Based on the above consideration,this article discusses executive external pay gap between its relationship with environmental protection investment and the influence of external governance environment on the relationship between the two,analysis of enterprise executives external pay gap of environmental protection investment mechanism,to explore enterprises enhance the investment level of environmental protection and build a reasonable compensation mechanism has important theoretical significance and practical significance.Based on principal-agent theory,social responsibility theory,social equity theory and resource-based theory as well as scholars’ research results,this paper empirically tests the impact of executive external pay gap on enterprises’ environmental investment by using multiple regression model based on the data of listed companies in the a-share heavily polluting industries in Shanghai and Shenzhen from 2012 to 2020.The moderating effect of industry competition and government intervention and the mediating effect of the accuracy of management’s earnings forecast are also investigated.The results show that :（1）executive positive external pay gap can promote enterprise environmental investment,while executive negative external pay gap can inhibit enterprise environmental investment;（2）Industry competition has different moderating effects on the relationship between external executive pay gap of different nature and corporate environmental investment.Industry competition will weaken the promotion effect of executive positive external pay gap on enterprise environmental investment,and industry competition will weaken the inhibition effect of executive negative external pay gap on enterprise environmental investment;（3）Whether executive pay is above or below the industry average,the enhanced degree of government intervention will reduce the level of enterprise environmental investment;（4）Managers’ confidence and managers’ self-interest play a partial mediating role in the impact of executive external compensation gap on corporate environmental investment.The positive external pay gap of executives improves managers’ confidence,alleviates executives’ concerns about the cost and risk of environmental investment,and encourages enterprises to improve the level of environmental investment.The negative external pay gap of senior executives makes senior executives have self-interested motivation and are unwilling to invest energy and resources in the prevention and control of environmental pollution,thus reducing the level of investment in environmental protection of enterprises.According to the above conclusions,this article has the following three suggestions:Firstly,formulate a reasonable compensation contract mechanism to guide executives to do their due work,carefully consider the industry’s compensation level,and link the compensation mechanism with environmental benefits;Secondly,to create a good external governance environment,adhere to the governance principle of market regulation,external intervention as a supplement;Finally,enterprises enhance environmental awareness,shoulder the responsibility of environmental pollution prevention and control.