Polluting Enterprises Research Articles

Green Credit Policy and Digital Transformation of Highly Polluting Enterprises

This study empirically analyzes the impact of green credit policy implementation on the digital transformation of highly polluting enterprises by constructing a double difference model using observed data of A-share listed companies in Shanghai and Shenzhen in China from 2007-2021, and using the Green Credit Guidelines promulgated in 2012 as a quasi-natural experiment. It is found that: (1) the implementation of green credit policy inhibits the digital transformation of highly polluting enterprises; (2) financing constraints are an important mechanism by which green credit policy inhibits the digital transformation of enterprises; and (3) the inhibitory effect of green credit policy on the digital transformation of enterprises is more significant for state-owned enterprises and relatively weak for large-scale enterprises. The research in this paper helps to systematically and comprehensively understand the impact of green credit on the digital transformation of enterprises, scientifically assess the policy effects of green credit policies in China, and is important for understanding how green financial policies in China affect the transformation and development of highly polluting enterprises, and provides reference for the future green financial policy formulation of government departments.

The Environmental Protection Responsibility of Multinational Enterprises

In the context of economic globalization, more and more multinational enterprises are choosing to move their highly polluting companies to low-income developing countries that are rich in resources, and these highly polluting enterprises are causing huge disasters to the environment of these developing countries. Therefore, multinational enterprises need to take responsibility for environmental protection. However, it is not enough to rely on the self-regulation of multinational enterprises, but the international community, together with the home countries of multinational companies and host countries, should also regulate multinational companies.

Can green finance policies affect corporate financing? Evidence from China's green finance innovation and reform pilot zones

This study investigates the impact of China's Green Finance Innovation and Reform Pilot Zones on corporate financing. I view the "Green Finance Innovation and Reform Pilot Zones" piloted in certain provinces in China as a quasi-natural experiment and use a Difference-in-Differences (DID) approach to explore the impact of this policy on corporate debt financing costs and financing scale. The results show that the green finance pilot zone policy increases the financing scale of green enterprises and reduces that of polluting enterprises, but it does not significantly impact financing costs. The policy provides more apparent financial support for non-state-owned and small scale green enterprises, while imposing stricter constraints on the financing scale of large and less profitable heavy polluting enterprises. Additionally, the policy's "incentive effect" on green innovation in green enterprises is not significant. However, its "compelling effect" on green innovation in polluting enterprises is quite noticeable.

Can the Green Finance Reform and Innovation Improve Green Investment of Heavily Polluting Enterprises?

Determining whether the Green Finance Reform and Innovation Pilot Zone (GFRI) promotes the green investment (GI) of enterprises is practically important for China to achieve the “double carbon” goal early. This study examines the effect of GFRI on GI by the relevant data of listed heavily polluting enterprises in China from 2011 to 2020 and a difference-in-difference model. The results show that GFRI improves the GI of enterprises, and GFRI can enhance GI by promoting reputational costs and loan scale. The improvement effect is also more significant for state-owned enterprises, enterprises with high financing constraints, enterprises in regions with high environmental regulation intensity, and enterprises with executives’ financial backgrounds. The improvement in GI can further enhance the value of enterprises after the implementation of GFRI. The study provides a direct answer to the key question of whether the GFRI can actually support high-quality economic development.

Mandatory Environmental Regulation, Enterprise Labor Demand and Green Innovation Transformation: A Quasi-Experiment from China’s New Environmental Protection Law

To improve the human living environment and maintain the balance of the ecosystem, the Chinese government implemented a new environmental protection law (NPL) in 2015. Based on data for Chinese A-share listed companies and prefecture-level cities from 2005 to 2020, a difference-in-difference model is used to empirically explore the impact of the mandatory environmental regulation on labor demand (LD) and green innovation transformation (GIT) for heavy pollution enterprise (HPE). The results indicate that NPL leads HPE to reduce LD and achieve GIT, compared to non-HPE. This finding still holds by a series of robustness tests. Lower financial constraints and higher fintech can alleviate the negative impact of the NPL on the LD of HPE and enhance the positive impact of the NPL on the GIT of HPE. From regional heterogeneity, NPL causes HPE to increase their labor in the eastern region but reduce labor in the middle and western regions. NPL positively affects the GIT and shows a “U” shape from the east-middle-west regions. From enterprise heterogeneity, NPL mainly has a significant dampening effect on the LD for old and high staff cost enterprises and has a greater positive impact on the GIT for these both types of enterprises. Meanwhile, there is a gradually increasing lag in the impact of NPL on LD and GIT. Our findings provide new perspectives for the government to implement the policy of NPL and for enterprises to transform development.

The impact of environmental tax laws on heavy-polluting enterprise ESG performance: A stakeholder behavior perspective

Environmental taxation is an essential tool employed by governments to compel polluting enterprises to undergo green transformation, thereby achieving sustainable development. This paper uses Differences-in-Differences (DID) approach to assess the impact of the China's environmental tax law on the ESG performance of heavily polluting industries. Furthermore, it examines the moderating effect of stakeholder behavior on the relationship between the environmental tax law and the ESG performance of firms. The research findings indicate that the environmental tax law significantly enhances the ESG performance of heavy polluting enterprises by improving the environmental factor. However, heterogeneity is observed based on ownership characteristics and regional variations. Auditors, mass media and corporate ethical behavior exhibit a significant positive moderating effect on the causal relationship between the environmental tax law and the ESG performance of heavily polluting enterprises. This study contributes to a clearer understanding of the intrinsic relationship between environmental tax laws and ESG performance, and offers insights from the perspective of stakeholder behavior for formulating a path towards sustainable development in the country, thereby providing policy lessons for numerous developing countries worldwide.

Research on the Effect of the New Environmental Protection Law on the Market Competitiveness of China’s Heavily Polluting Enterprises

Based on a difference-in-differences model, this study examines the effect of environmental regulation on the market competitiveness of heavily polluting enterprises, their mechanisms, and the space for effective implementation. Which all listed heavily polluting enterprises between 2010 and 2019 are included as the experimental group, and all other firms in the same industries listed on the Chinese stock market as the control group. The results indicate that environmental regulations have significantly increased the market competitiveness of heavily polluting enterprises in China. Furthermore, China’s New Environmental Protection Law (NEPL) has improved the market competitiveness of heavily polluting enterprises through strategic, flexible mitigation effects. Finally, the NEPL in regions with eastern or non-state enterprises has a significant impact on market competitiveness. The government should further improve laws and regulations for environmental protection, increase environmental regulations, and apply policies based on the differences in heavily polluting enterprises.

Tackling China's local environmental policy implementation gap: An evolutionary game analysis of China's environmental protection inspection system

Despite China's stringent environmental regulations, there has been a persistent policy implementation gap at local level, specifically due to local protectionism and inadequate enforcement measures. To address this issue, the Central Environmental Protection Inspection (CEPI) initiative was launched in 2016, replacing the Regional Environmental Protection Inspection (REPI) system. This study examines why the REPI failed to tackle the implementation gap and how the CEPI works. This is achieved by constructing a tripartite evolutionary game (EG) model consisting of the central government, local governments, and polluting enterprises. Using system dynamics (SD), the study simulates and analyzes the behavior and strategies of the three game players in two scenarios, namely weak and strong negative incentives. Then, this study analyzes the evolutionary process of environmental protection inspection (EPI) by means of a case study. The results show that: (1) the strategy adopted by polluting enterprises depends on the actual signal conveyed by the local governments. In addition, whether the strong regulatory signal of the central government can be effectively transmitted to polluting enterprises mainly depends on the attitude of the local governments. (2) The CEPI conveys a reliable commitment and provides effective external stimuli that adjust the incentive structure of local governments. Meanwhile, the REPI lacked significant punishment measures, which made it difficult for the central government's environmental regulatory signals to reach polluting enterprises in an effective manner. This study contributes to a better understanding of the evolutionary process and causes of the EPI system, as well as how the Chinese government tackles the local environmental policy implementation gap.

Spatial response relationship between mining and industrial activities and eco-environmental risks in mineral resource-based areas.

Mining and industrial activities in mineral resource-based areas are important sources of potentially toxic elements (PTEs) in the soil, which lead to spatial heterogeneity in regional eco-environmental risks. In this study, we analysed the spatial response relationship between mining and industrial activities and eco-environmental risks using Anselin local Moran's I index and bivariate local Moran's I index. The results showed that the proportions of moderate, moderate to strong, and strong pollution of PTEs in the study area reached 30.9%. The high clusters of PTEs ranged from 5.4 to 13.6%, and were mainly distributed around cities. The influence of different types of metal mines on eco-environmental risks was nonferrous metal mines > precious metal mines > ferrous metal mines. In turn, that of different pollution enterprises was manufacturing industry > other industries > power and thermal industries. Our research demonstrates that there was a significant spatial response relationship between densities of mines and enterprises and eco-environmental risk level. High-density metal mines (5.3/100 km2) and high-density pollution enterprises (10.3/100 km2) resulted in the local high risk. Consequently, this study provides a basis for regional eco-environmental risk management of mineral resource-based areas. With the gradual depletion of mineral resources, high-density pollution enterprise area should be paid more attention to, which would pose a threat not only to the environment but also to population health.

How does green finance affect the innovation performance of enterprises? Evidence from China.

"green" + "innovation" has become a new concept of development. The integration of the two can bring win-win for the environment and economy. This paper selects the annual data of 14309 A-share companies in Shanghai and Shenzhen Stock Exchange from 2012 to 2020 as the research sample. And it uses the two-way fixed effect model to empirically test the impact of green finance on enterprise innovation performance. The study found that the development of green finance can promote the improvement of enterprise innovation performance. The analysis of influence mechanism shows that the development of green finance can reduce the financing constraints of enterprises, and then improve the innovation performance of enterprises; the development of green finance can increase the R&D investment of enterprises, and then improve the innovation performance of enterprises; green finance development can increase corporate investment in environmental protection, which in turn can improve corporate innovation performance. The results of heterogeneity test analysis show that compared with the western region, private enterprises, small and medium-sized enterprises, and high energy consumption and high pollution enterprises, the development of green finance in the central and eastern regions, state-owned enterprises, large enterprises, and non double high enterprises has more obvious role in promoting enterprise innovation performance. Therefore, the government should issue relevant policies and actively promote green finance policies that can help improve environmental and economic issues.

The Polarization Effect and Mechanism of China’s Green Finance Policy on Green Technology Innovation

The advancement of green technology innovation (GTI) is crucial for facilitating green development. China, the largest carbon-emitting economy, should prioritize the acceleration of GTI to augment global green economic growth and reduce carbon emissions. Green finance policy (GFP) is a common instrument for encouraging enterprises to develop GTI. This study, therefore, takes the pilot policy of China’s Green Finance Reform and Innovation Pilot Zone as a “quasi-natural experiment” and uses the difference-in-differences method to explore the impact and mechanism of GFP on Chinese enterprises’ GTI. Based on the empirical analysis using microdata from Chinese industrial enterprises from 2015 to 2021, the following conclusions can be drawn. First, GFP has a green innovation polarization effect. It facilitates the development of GTI in green enterprises while hindering the progress of GTI in polluting enterprises. Second, GFP enhances the GTI of green enterprises by promoting innovative behaviors and factor allocation optimization behaviors. However, GFP reduces the GTI of pollution enterprises by promoting non-innovative investments and reducing the efficiency of factor allocation optimization. Third, the combination of policies utilizing GFP, environmental subsidy, and R&D subsidy can effectively increase the GTI of polluting enterprises without compromising the GTI of green enterprises. This study offers empirical evidence and policy recommendations for establishing a green finance system in developing countries.

How Tripartite Stakeholders Promote Green Technology Innovation of China’s Heavily Polluting Enterprises?

Green technology innovation of heavily polluting enterprises is a critical way to alleviate environmental pressure and promote sustainable development. However, the ways in which the interaction of influencing factors affects heavily polluting enterprises in green technology innovation in China have not been fully addressed and need to be investigated in this field. This paper explored the impact of government environmental regulation, corporate social responsibility (CSR), and public attention on promoting green technology innovation of heavily polluting enterprises based on S-O-R (stimulus–organism–response) and stakeholder theories. The panel data of A-share listed companies in China’s heavily polluting industries from 2008 to 2020 was used to investigate their interactions by adopting POLS (Pooled Ordinary Least Square) method. The main results show that (1) environmental regulation has a significant positive effect on green technology innovation; it especially has a great impact on state-owned heavily polluting enterprises; (2) CSR plays a mediating role between environmental regulation and green technology innovation; (3) public attention has a moderating effect between CSR and green technology innovation and also moderates the indirect effect of environmental regulation on green technology innovation through CSR. The results illustrate that green technology innovation should be not only guided by governmental regulation, but also supplemented by enterprises’ internal driven force and public supervision, which can give implications for promoting the development of green technology innovation and optimizing environmental policy tools.

Research on the impact of green finance on the construction of enterprise carbon credit system——Regulation effect based on media supervision

Under the background of carbon peak and carbon neutralization, it is of great significance for heavy pollution enterprises to implement the construction of enterprise carbon credit system. This paper takes 215 medium and heavy polluting enterprises listed in China's Shanghai and Shenzhen A-share companies from 2015 to 2019 as research samples, uses multiple regression model and regulatory effect model to analyze the impact of corporate green finance on the quality of carbon credit system construction and explore the regulatory role of media regulation. The study found that when the development level of green finance is high, the construction quality of carbon credit system is also high. Further research found that media regulation plays a positive regulatory role in the positive correlation between green finance and the quality of carbon credit system construction.

Impact of environmental tax on pollution control: A sustainable development perspective

China’s implementation of the Environmental Protection Tax Act in 2018 aimed to promote sustainable development and reduce pollutant emissions yet its mechanism and impact of pollution reduction are not clear. This study collected data from 287 cities between 2010 and 2019 in order to evaluate the impact of this tax on reducing pollution and assess its mechanism. The results show that the environmental tax had a significant spillover effect on reducing emissions of sewage, waste gases, and solid waste, suggesting that the implementation of environmental tax policies and their emission reduction effects can be enhanced through regional collaboration and intergovernmental cooperation. Furthermore, the impact of pollution control was more significant in cities with a higher concentration of heavy polluting enterprises, that is, the central and eastern regions and cities with large population. The impact of the policy was threefold: Firstly, the tax prompted the control of pollution by changing the external costs of pollution into the internal costs for businesses. Secondly, through the promotion of green innovation, the regulating bodies tracked and limited their pollutant emissions. Thirdly, the policy boosted the development of environmental protection facilities which aid in controlling pollutant emissions. The mechanism analysis suggests that the pollution control effectiveness of environmental taxation can be further improved by adopting a comprehensive and multi-dimensional approach to environmental protection measures. This study offers valuable policy guidance for the effective implementation of environmental taxation and provides a solid theoretical foundation for collaborative pollution control and multi-dimensional alleviation of environmental pollution, thus it has significant implications for promoting sustainable development.

The Moderating Role of Environmental Information Disclosure on the Impact of Environment Protection Investment on Firm Value

The presence of a link between corporate environmental protection investment and firm value is essential for enterprises to have incentives to invest in environmental protection by themselves. How environmental information disclosure affects the relationship between environmental protection investment and firm value is also an issue worth exploring. This paper uses the regression model with the industry and time-fixed effects to examine the relationship between environmental protection investment and firm value of China’s A-share heavily and non-heavily polluting enterprises from 2010–2020, as well as the moderating role of environmental information disclosure. The empirical results show that (1) there is a significant U-shaped relationship between environmental protection investment and firm value, and (2) corporate environmental information disclosure has a moderating effect. Specifically, it has an “amplifying” effect on the relationship between environmental protection investment and firm value. If a company’s environmental protection investment is insufficient, overly transparent corporate environmental disclosure will exacerbate the decline in firm value. Once environmental protection investment is up to standard, adequate disclosure can contribute to an increase in firm value.

Financing decision of heavy pollution enterprises under green credit policy: Based on the perspective of signal transmission and supply chain transmission

More and more countries have successively promulgated various environmental policies to mitigate climate change and environmental pollution. These policies have become important in promoting low-carbon development and green transformation through enterprise financing. This study employs a difference-in-difference (DID) model to examine how a green credit policy affects the financing choices of highly polluting businesses using the data of A-share listed corporations from 2009 to 2021. The research finds that: (1) The number of bank loans has significantly decreased for highly polluting companies; a green credit policy will also reduce the scale of any non-bank loans. (2) The extent of equity financing and bond financing of highly polluting firms on the capital market decreased due to market constraints and the function of policy signaling. (3) The impact of a green credit policy will spread to upstream and downstream enterprises through trade credit, thus reducing enterprises’ commercial credit scale. (4) The impact of a green credit policy on bank loans is more significant in state-owned enterprises, in regions with a high degree of marketization, and in regions with low intensity environmental regulation. The research results provide targeted policy recommendations for promoting the development of green credit and achieving carbon neutralization.

Environmental Regulation and Green Innovation -Testing Porter Hypothesis from the Financial Constraint Perspective

Green innovation is the central pillar of green transformation of economic development. To boost green innovation, the stimulation of heavily polluting enterprises to increase green investment is essential. This paper investigates how the introduction of environmental regulations influence high polluting enterprises’ green investment and compares the different policy responses for enterprises with various degree of financial constraints. Our results suggest that the Chinese government could design customized environmental policies for different types of enterprises and modify these policies in time accordingly. In addition, the government should provide additional assistance for high polluting enterprises by providing environmental subsidies and tax reductions to strengthen incentives for green innovation.

The impact of green mergers and acquisitions on illegal pollution discharge of heavy polluting firms: Mechanism, heterogeneity and spillover effects

This paper is to discuss the impact of green mergers and acquisitions (GMA) on illegal pollution discharge (ILP). The diurnal difference pollution data of the nearest monitoring station around heavy polluting enterprises are used to measure ILP. Results show that: (1) Compared with polluting firms that have not conducted GMA, GMA can reduce ILP by 2.9%. (2) Large scale, strong industrial correlation and cash payment of GMA is more conducive to controlling ILP. GMA in the same city is easier to inhibit ILP. (3) Impact paths of GMA on ILP mainly include cost effect, technology effect and responsibility effect. GMA aggravates ILP by increasing management costs and risk control risks. GMA inhibits ILP by increasing green innovation, environmental protection investment, social responsibility performance and environmental information disclosure. (4) GMA has a greater inhibition effect on ILP in state-owned firms, technology-intensive firms and eastern firms. (5) The industrial spillover effect of GMA is more obvious than that of the same city. This paper provides implications for curbing ILP from the perspective of GMA.

Dynamic comparison on the technical efficiency between China's EPEs and PEs: Two-dimensional measurement based on SFA

It is of equal importance to improve the efficiency of environmental protection enterprises (EPEs) and polluting enterprises (PEs) for Environmental Protection and Green Development, which is a micro-foundation for China's economic transformation and high-quality development. This paper redefines the efficient frontier of enterprises, distinguishing between “absolute technical efficiency” (ATE) and “relative technical efficiency” (RTE), and conducts two-dimensional measurements and dynamic comparison to examine the technical efficiency characteristics of China's EPEs and PEs listed on the A-share market, based on the stochastic frontier analysis (SFA) method. The results demonstrate that, first, the ATE of EPEs exhibits a reverse upward trend, while the ATE of PEs and A-share enterprises as a whole is declining simultaneously. Second, in contrast to the shrinkage of the ATE and RTE of PEs, the efficient frontier of EPEs has experienced rapid expansion. Third, capital utilization efficiency, rather than economies of scale effects, appears to be the main obstacle impeding the technical efficiency performance of EPEs. Therefore, improving the capital utilization efficiency and the extent of coupling and coordination between capital and labor is the key to promoting the technical efficiency of EPEs. Fourth, targeted government subsidies and tax refunds for EPEs need to be improved and an external evaluation mechanism focusing on Environment, Social and Governance (ESG) rating needs to be strengthened. Consequently, it is essential to promote the combination of top-down targeted policy support and multi-dimensional external evaluation to guide capital flows and achieve their efficient utilization, which is also the basis of the environmental protection industry's high-quality development.

The spatial difference-in-difference measurement of policy effect of environmental protection interview on green innovation

This study applies the classical difference-in-difference (DID) and spatial difference-in-difference (SDID) approach to measure the policy effect of the mandatory environmental protection interview (EPI) on green innovation with focus on 11,567 industrial manufacturing enterprises in Yangtze River Delta (YRD), China. Overall, the mandatory EPI has significantly promoted green innovation in industrial manufacturing enterprises in YRD by 0.399 units, which is greater than its promotion in green innovation for national industrial enterprises. Industrial manufacturing enterprises tend to increase utility patents more than invention patents under the impact on EPI. A heterogeneity analysis shows that EPI plays a larger role in promoting green innovation for highly polluting enterprises and privately owned enterprises than low polluting enterprises and state-owned enterprises. The innovative application of SDID approach precisely identifies that mandatory EPI has negative and positive effect on green innovation for the interviewed and non-interviewed neighbouring YRD cities. The EPI has a deterrent effect on the non-interviewed cities and stimulates their self-reliance innovation behaviours to realizing green innovation promotion. Except for the highly polluting enterprises with lower government environmental subsidy (GES) tending to purse more GI under EPI, the overall adjustment effect of GES on EPI to have a policy effect is insignificant.