Environmental Pollution Liability Insurance And Corporate Cash Holding Level

Since 1995,a green financial system has begun to be gradually established in our country;green credit has achieved steady growth considering high credit quality.In terms of labelled green bonds,the issuance scale will reach 646.349 billion yuan in 2021,leading the world.Green insurance effectively guides enterprises to transform into a sustainable development model.The emergence of environmental pollution liability insurance is conducive to taking the risk and cost of environmental pollution accidents into consideration when making decisions.Secondly,environmental pollution insurance has the function of transferring and dispersing risks,transferring the environmental risks of enterprises through professional insurance companies,and increasing the stability of operation.Finally,environmental pollution liability insurance is policy insurance supported by the government.If a company is insured,it can receive government support,which is helpful for enterprises development.However,after a long period of growth,purchase and penetration rates remain low,and it urgently needs the attention of the government.After reading and sorting out much research,it is found that most domestic and foreign researchers focus on theoretical research such as institutional construction,legal system,and supply and demand dual cooling.There was little research involving the micro-subject of enterprises.Therefore,analyzing the relationship between environmental pollution liability insurance and corporate cash holdings in this thesis,and puts forward four hypotheses:(1)After purchasing Environmental pollution liability insurance,corporate cash holdings could be reduced;(2)The cash reduction effect of environmental pollution liability insurance is more obvious in companies with greater financing constraints;(3)The cash holding reduction effect of environmental pollution liability insurance is more obvious for enterprises in regions with a high degree of marketization.(4)Environmental pollution liability insurance effect on lower level of cash holdings,which works better in non-state-owned enterprise.Secondly,based on above-mentioned theoretical mechanism,it is urgent to establish empirical model,to further test the hypothesis proposed in this thesis.The data about enterprises that has purchased insurance in 2014 and 2015 were obtained from the Ministry of Environmental Protection,combined with the relevant financial data from CSMAR database,and the hybrid OLS model was used to verify the hypotheses.Based on the regression results,the following conclusions are drawn:(1)Purchasing environmental pollution liability insurance can play a role in reducing corporate cash holdings.Because it can reduce the environmental risk and capital market recognition;At the same time,it can also enjoy the support of government,which can lower 0perating cost.Thereby reducing the cash retention of the enterprise.(2)For companies with large financing constraints,environmental pollution liability insurance has a more remarkable effect on corporate cash holdings.The reason why enterprises have large financing constraints is that their environmental risks are very large.Enterprises with large financing constraints face greater environmental risks,and enterprises need to retain more funds to resist environmental risks,so their cash holdings are relatively high.Once the risk is transferred,the company’s cash holdings will be reduced,so the effect of cash reduction is more obvious.(3)Compared with regions with a slower marketization index,the cash holding reduction effect of environmental pollution liability insurance works better for enterprises in regions with high marketization.Enterprises located in areas with rapid marketization have developed economies and relatively complete markets,with relatively high market information transparency and greater recognition from the capital market.In addition,environmental risk management methods in areas with rapid marketization and the management technology is more developed,the legalization is high,the environmental risks and illegal costs faced by enterprises are high,and the environmental pollution liability insurance has a greater impact on them,and enterprises can reduce their cash holdings to a greater extent.(4)Reducing effect of environmental pollution liability insurance on cash holdings,compared with state-owned enterprises,which works better in non-stateowned enterprise.Environmental risk is a huge risk that heavily polluting enterprises faced.It can reduce environmental risks,alleviates the problem of financial resource inclination in a certain extent,and ensure that non-state-owned enterprises enjoy policy indorsement.Finally,there are suggestions from four perspectives have been proposed: from country,from government,from the insurers and the insured.In this thesis,it studies the relationship between environmental pollution liability insurance and heavy polluting enterprises who purchase this insurance.It can promote enterprises to deeply understand the efficiency of environmental pollution liability insurance,improve depth and density of insurance,and play the role of this type of insurance in environmental governance and protection.