Abstract
China's government environmental protection-related departments attach great importance to the environmental pollution problems of petrochemical enterprises. The Environmental Protection Law as the core ecological regulation policy has been continuously improved to address the impact of macroenvironmental regulation on micro-individual petrochemical enterprises. The study subjects are 182 petrochemical companies from 2011-2021. The effect of different environmental regulations on the financial performance of petrochemical companies is studied empirically using a time-fixed effects model and a mediating effects model and using principal component analysis based on an agency cost perspective. The results show that environmental regulations significantly improve petrochemical firms' financial performance and suppress agency costs. Agency costs play a partial mediating role in the process of environmental regulations affecting financial performance.
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