Air Quality And Corporate Capital Structure

Capital structure has always been one of the core problems in the field of corporate finance.In recent years,with the continuous development of econometrics,domestic and foreign scholars are no longer satisfied with the static analysis of enterprise capital structure,but gradually open the era of dynamic analysis.Existing studies show that the target capital structure does exist in enterprises,but due to the existence of adjustment costs,the capital structure of enterprises usually does not immediately move towards the target capital structure,but carries out partial adjustment.At present,the research on the speed of the adjustment of enterprise capital structure is mainly divided into internal and external factors.The internal factors focus on the adjustment cost of the enterprise,the characteristics of the enterprise and the characteristics of the enterprise management,while the external factors focus on the industry level and the macro environment including economy,politics and law.However,there are few studies on the relationship between external environmental factors such as air quality and dynamic adjustment of enterprise capital structure.However,as one of the most concerned environmental problems,air pollution is also the external environmental challenge that enterprises must face.In this regard,this paper decides to focus on the possible influence of air quality,an external environmental factor,on the speed of capital structure adjustment of enterprises,and further explore the possible conduction path within the relationship between the two,in order to finally put forward some feasible suggestions with universal applicability on the basis of the research conclusions.This paper takes A-share listed companies in Shanghai and Shenzhen from2015 to 2021 as research samples and uses A one-stage partial adjustment model to explore the relationship between air quality and the speed of corporate capital structure adjustment.Then,the property nature,debt level and product market competition level of the company are taken as the group indicators to explore the heterogeneous performance of the company under different groups.Furthermore,the robustness of the core conclusion is tested by alternative variables,regression method and instrumental variable method.Finally,based on the relevant literature and theoretical analysis,this paper explores the mechanism of the above relationship from the perspective of financing constraint and manager decision.Through the empirical test in the main body,the empirical research results of this paper show that:(1)The air quality index is negatively correlated with the dynamic adjustment speed of enterprise capital structure,that is,the higher the air quality index is,the more serious the air pollution is and the slower the dynamic adjustment speed of enterprise capital structure is.(2)There is no significant difference between state-owned enterprises and non-state-owned enterprises in the impact of air quality on the speed of capital structure adjustment,that is,the relationship between the two is not affected by the nature of property rights.(3)Compared with under-indebted enterprises,air quality has a greater impact on the speed of capital structure adjustment in over-indebted enterprises.(4)Air quality has a significant impact on the speed of capital structure adjustment in enterprises with high market competition level,but not in enterprises with low market competition level,that is,the relationship between the two is affected by the level of product market competition.(5)From the robustness analysis results,after using six methods to test the robustness of the model,namely replacement of explanatory variables,replacement of explained variables,replacement regression method,mechanical mean regression phenomenon,explanatory variables lagging one stage,and endogeneity problem,the empirical results were basically the same as the benchmark regression results,which further verified the reliability of the research conclusions in this paper.(6)The possible transmission mechanism between air quality and the speed of capital structure adjustment of enterprises is further explored from the two aspects of external financing and internal management decision-making.The research finds that air pollution inhibits the speed of capital structure adjustment of enterprises by improving the degree of financing constraint and the short-sighted level of managers.Based on the conclusions of this paper,this paper finally puts forward feasible suggestions with universal applicability from the perspectives of enterprises themselves,government departments and investors:(1)Enterprises should combine their economic benefits with social and ecological benefits,and at the same time actively exert their subjective initiative to optimize the capital structure of enterprises.(2)Government departments should establish and improve relevant environmental laws and regulations,create a good social environment for environmental protection,and help construct an orderly and open market financing environment.(3)When investors carry out investment activities,they can include the air quality index of the location of the enterprise into the value judgment framework of the enterprise.