Analysis on the Relation between Strengthening Internal Management and Economic Benefit of China’s Petrochemical Enterprises under the Restriction of Market Environment

Abstract

This paper studies the external impact of China’s energy policy and market environment changes on the economic benefits of petrochemical enterprises, and the internal impact of internal control and management of petrochemical enterprises on their economic benefits. In 2010-2017, China’s energy economic policy has been adjusted, the market environment has undergone major changes. This paper quantifies these two factors into indexes and combines them with the internal control index of enterprises to apply them to the economic benefit model of petrochemical enterprises, Regression analysis has been used for positive analysis. The study finds the changes of China’s energy policy have played a guiding, regulating and promoting role in the development of petrochemical enterprises; the more restrictions the market environment imposes on petrochemical enterprises, the worse the economic benefits of petrochemical enterprises are. Strengthening internal control in petrochemical enterprises can offset some unfavorable factors and the economic benefits of downstream petrochemical enterprises are better than those of upstream ones. The paper reveals the effects of energy policy action index, market environment restriction index and internal control index on economic benefits of petrochemical enterprises. The policy recommendations are as follows:The governments should improve the market environment and formulate policiesthat will benefit upstream petrochemical enterprises, especially oil and gas extraction enterprises, in raising product prices and increasing profit margins.