Can the Leading Officials' Accountability Audit of Natural Resources policy stimulate Chinese heavy-polluting enterprises' green behavior?

Abstract

Under the pressure of environmental crisis caused by production and economic development, a policy for Leading Officials' Accountability Audit of Natural Resources (LOAANR) was issued in 2014 to reduce the environmental risks and gain high-quality economy. Taking LOAANR policy as the research object, and based on 2011 to 2018 panel data from Chinese heavy-polluting enterprises, this paper employed a two-way fixed difference-in-differences (DID) model to explore the relationship between the LOAANR, environmental costs (ECs) and green innovation (GI). It was found that the implementation of the LOAANR significantly promoted enterprise GI, with the regulating impact mechanism, EC. GI efficiency was measured by continuous DID method. A heterogeneity analysis revealed that non-state-owned enterprises (NSOEs) were more eager to environmentally innovate. A corporate life cycle heterogeneity analysis of the GI policy effect found that the policy effect was negative in the decline stages. Compared with the eastern Chinese enterprises, enterprises in other regions were found to be more prone to positively adopting GI to maximize benefits in the face of the LOAANR. The policy was observed to have inhibited GI in central Chinese enterprises. It was also demonstrated that the policy effect has time and regional dynamic effect. Common trend, placebo, PSM-DID tests, and another robustness regressions were applied to support the conclusions. All the findings are expected to provide basic theoretical guidance for more environmental policies and high-quality production.