Abstract
After the central environmental protection inspector, the external environmental regulatory environment facing enterprises has undergone tremendous changes. This paper uses the double-difference method, using data from Shanghai and Shenzhen A-share listed companies from 2013 to 2017, to empirically test the impact of the central environmental protection inspector and its mechanism. The research results show that the financial performance of listed polluting companies has significantly improved after the central environmental supervision, but the improvement of financial performance has heterogeneity of property rights, and state-owned enterprises are significantly higher than non-state-owned enterprises. Further analysis shows that there is significant positive earnings management in state-owned listed polluting enterprises, while non-state-owned enterprises are not. This paper analyzes the impact of the central environmental protection inspector on the production and operation of the enterprise in a timely manner, and beneficially supplements the differences in earnings management of heavily polluting enterprises in the procyclical period, and supplements relevant literature.
Highlights
The problem of air pollution accompanying China’s rapid economic growth has caused more and more attention
The research results show that the financial performance of listed polluting companies has significantly improved after the central environmental supervision, but the improvement of financial performance has heterogeneity of property rights, and state-owned enterprises are significantly higher than non-state-owned enterprises
This paper analyzes the impact of the central environmental protection inspector on the production and operation of the enterprise in a timely manner, and beneficially supplements the differences in earnings management of heavily polluting enterprises in the procyclical period, and supplements relevant literature
Summary
The problem of air pollution accompanying China’s rapid economic growth has caused more and more attention. On January 4, 2016, the Central Environmental Supervision Team, officially unveiled and supervised the environmental protection work of the local government, which opened a new chapter in China’s air pollution control. The strict environmental protection inspection brought by the “exogenous” organization of the Central Environmental Protection Inspection Group, which was established in January 2016, is regarded as a quasi-natural experiment, and an empirical study of its policy effectiveness is based on the “follow the cost theory”. Based on China’s national conditions, this article has thoroughly examined the different impacts of strict environmental inspections on different enterprises and different regions, using data to prove the effectiveness of policies, and provides a certain reference value for policy makers to further optimize air pollution control policies
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