The Impact of Environmental Regulation on Green Investment: The Regulatory Role of Internal Control

Abstract

This paper takes the heavily polluted listed companies in Shanghai and Shenzhen A-shares in China from 2010 to 2018 as the research sample, and uses stata software to empirically test the impact of different dimensions of environmental regulation tools on corporate green investment, and further explores the regulatory role of internal control. The research shows that the relationship between administrative order type environmental regulation and public participation type environmental regulation and green investment of enterprises is inverted U-shaped, while the relationship between market incentive type environmental regulation and green investment of enterprises is positive U-shaped; Market incentive environmental regulation and public participation environmental regulation can strengthen the role of administrative order environmental regulation on green investment; Internal control plays a regulatory role in administrative order type environmental regulation and market incentive type environmental regulation. The conclusions of the study provide useful enlightenment for the government to make reasonable planning for different dimensions of environmental regulation, promote internal control of enterprises and increase green investment of enterprises.