The Influence Of Foreign Institutional Investors On Corporate Environmental Governance

In order to improve economic development from a "quality" perspective,our government has proposed a series of new development plans and requirements,including "Beautiful China" and "Ecological Strategy",which require Green development and low-carbon development should be implemented.As an important part of green development,environmental protection investment plays an important role in the construction of ecological civilization.However,the reality is that the government still plays a major role in China’s environmental protection investment,enterprises are more focused on achieving short-term economic benefits,there is a general lack of investment in environmental protection.Therefore,the issue of corporate environmental investment has become an important topic of common concern for government,enterprises and research.This thesis examines the theoretical aspects of the paths by which foreign institutional investors’ shareholdings affect corporate environmental governance.Finally,empirical analysis is used to demonstrate the existence and path of foreign institutional investors’ shareholding affecting corporate environmental governance.The study finds that foreign institutional investors can enhance the performance of firms in environmental performance.Unlike domestic institutional investors,foreign institutional investors do not have the means to directly and effectively influence corporate governance,and they place more emphasis on dialogue and negotiation to reach investment cooperation with companies,which makes foreign institutional investors pay close attention to some differentiated characteristics of companies,such as their environmental performance.Further,the positive signals of high foreign institutional investors’ holdings will be transmitted to other investors in the market.Based on the market’s recognition of foreign institutional investors’ expertise and possible inside information,they will be more optimistic about the future potential of enterprises with high foreign institutional investors’ holdings and more likely to buy the enterprise’s shares,which will make the enterprise’s shares rise further and carry out equity financing through equity pledging or directed issuance,etc.financing,the corresponding financing cost will be reduced,and the efficiency of daily operation and management will be improved,which will eventually be reflected in the improvement of the enterprise’s environmental governance performance.In the heterogeneity analysis,it is found that foreign institutional investors are less effective in enhancing the environmental governance of Chinese SOEs than non-SOEs.This thesis focuses on the role of institutions and investors in the market for enterprises to carry out environmental.governance,which can provide a reference for institutional investors when investing in manufacturing and other listed companies.At the same time,enterprises make environmental protection investment is a voluntary behavior,and studying the different behaviors of enterprises’ environmental protection investment can also provide some constructive suggestions for government regulation.This research is not only helpful to implement a series of policies introduced by the government to broaden the institutional investors’ team and promote green ecological development,but also has an important role in transforming government units to optimize the traditional investor structure,improve the environmental system and how to continue to develop the green economy in the future.