Abstract
This article established an evaluation system including ecological efficiency that can provide a more accurate financial distress warning for companies. Based on the data of listed companies, Data Envelopment Analysis (DEA) is applied to evaluating the business efficiency, financial efficiency, financing efficiency, human capital efficiency, and ecological efficiency, and the accuracy of the evaluation system that includes ecological efficiency is measured by artificial neural networks (ANNs). Besides, the logit model is applied to test the results. Our experiments indicate that participating in ecological efficiency improves the evaluation system of financial distress warnings, and its accuracy is much better than the traditional evaluation system in the long run. The logit model confirms the essential of ecological indicators in financial distress warning, and the behavior of observing environmental regulation will prevent enterprises from getting into financial distress. Finally, suggestions on improving green finance and promoting technological innovation are propounded, in which technological innovation (TI) is the core of an enterprise’s competitiveness, and green finance can accelerate that process.
Highlights
Environmental regulation (ER) is a popular method both to reduce pollution and protect public health
For financial efficiency (b) and ecological efficiency (e), the mean value, position point, and limitation of special treated (ST) enterprises are lower than non-ST enterprises
Based on the data of listed companies, five dimensions of indicators are selected to measure the accuracy of the evaluation system, including business efficiency, financial efficiency, financing efficiency, human capital efficiency, and ecological efficiency
Summary
Environmental regulation (ER) is a popular method both to reduce pollution and protect public health. In recent years, it has been introduced actively in China, to alleviate the pollution that is mainly brought by industry. It has been introduced actively in China, to alleviate the pollution that is mainly brought by industry It is both a chance and a challenge for firms that are influenced by ER. The form of environmental regulation in China was ecological compensation supported by the governments, and it would promote local firms to put efforts into industrial transformation and technological innovation in order. Financial performance promotes environmental performance in the short run, while environmental performance feeds financial performance in the long run, in which environmental performance is believed to have a positive effect on business competitiveness [5]
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