Environmental Regulations and Corporate Green Investment: Evidence From Heavy Polluting Companies in China

Abstract

With the rapid development of the global economy, environmental pollution has become one of the main problems facing. As the main carriers of social production, companies create value for the whole society and also occupy the main resources. Heavy polluting companies have serious pollution discharge. They should bear more environmental protection responsibilities. Green investment of heavy polluting companies is the focus of social concern. Therefore, this paper selects 243 listed companies in China’s heavy polluting industry as samples to explore the impact of environmental regulations on corporate green investment. This study calculates the green investment amount of companies through the “content analysis method”, and divides the environmental regulation into formal environmental regulation and informal environmental regulation. A fixed panel model is constructed for research. The empirical results show that market-incentive environmental regulation and informal environmental regulation have a significantly positive impact on corporate green investment. There is no significant relationship between command-andcontrol environmental regulation and corporate green investment. According to this conclusion, this paper proposes some suggestions about green finance.