Capital Market Reaction Of Environmental Supervision And Supervision

Since the reform and opening up,the achievements of China’s economic development have attracted worldwide attention,and the people’s material standard of life has been constantly improved.However,the environmental problems caused by the rapid economic development have become increasingly prominent.Promoting the construction of a beautiful China and an ecological civilization society has become a hot spot of concern,which means that the public is more urgent to have a green ecological living environment.To this end,the Chinese government has actively taken a series of powerful environmental supervision measures to deal with the growing environmental pollution problem.As a major institutional innovation in the field of environmental supervision,the central environmental supervision system has the characteristics of central authority,rigid constraints,etc.It will give additional "punishment" to enterprises in the pollution industry.According to the theory of market efficiency and the theory of signal transmission,Investors in the capital market will change their investment expectations based on these information,thus affecting the stock price.In order to study the stock price effect under the constraint of the new environmental protection supervision scheme,this paper calculates the cumulative abnormal return rate of A-share listed companies under the announcement and implementation of the Central Environmental Protection Supervision Group’s "looking back" through the event study method,to measure the impact of this environmental supervision policy on the stock price of A-share listed companies,and establishes a multiple regression model for empirical analysis and comparison of the company’s industry types The market reaction under the difference of property right nature and governance capability provides a reference for the government’s environmental supervision policy formulation and the company’s management’s business behavior.The research shows that,(1)on the whole,whether on the announcement date of the "look back" policy of the central environmental protection supervisor or the actual inspection date,the promulgation and specific implementation of the "look back" policy of the central environmental protection supervisor will change the investment expectations of market investors in the short term,making the stock prices of companies in the pollution industry in the A-share market suffer a significant negative impact.(2)From the perspective of the nature of the company’s property rights,under the "looking back" regulatory constraint of the Central Environmental Protection Inspectorate,the impact on the stock price of state-owned pollution companies is smaller than that of non-state-owned pollution companies,and the impact gap is statistically significant,indicating that state-owned companies may bear less regulatory pressure by virtue of their political ties,thus enhancing the confidence of market investors.(3)From the perspective of corporate governance capability,the governance capability of a company is inversely proportional to its stock price impact,that is,the higher the quality of corporate governance,the smaller the market impact it will suffer,and this effect is more significant in the implementation of environmental regulatory policies.It shows that in the current capital market,the internal governance of polluting companies can play the role of "value stabilizer" in the face of the impact of environmental regulation.The main contributions of this paper are:(1)Through empirical research on the stock price effect of the central environmental protection supervision policy,this paper provides empirical evidence on the impact of environmental regulatory constraints on China’s capital market,and enriches empirical research literature on environmental regulatory constraints.(2)For the government,it is helpful to deepen the understanding of the impact of environmental regulation on the capital market.At the same time,it is noted that state-owned listed companies will be less punished by the market because of their special status,and it provides theory and experience for the development of subsequent environmental regulation policies.(3)For enterprises,companies in the pollution industry should pay attention to the possible negative impact of environmental supervision on the company’s share price,actively carry out green transformation,actively disclose their own environmental protection information,and establish a good environmental protection enterprise image;A company with low governance capacity should improve the quality of its internal governance,establish and continuously improve its internal governance system in a timely manner,actively perform its obligation of information disclosure according to law,and fully disclose the information necessary for investors to make value judgments and investment decisions.