How Do Environmental Subsidies Affect The Environmental Performance of Heavy Polluting Enterprises：Evidence From China

Taking 257 heavily polluted A-share listed companies in Shanghai and Shenzhen from 2010 to 2017 as research samples, this paper investigates the impact effect and mechanism of environmental subsidies on enterprise environmental performance. The study found that environmental subsidies have a positive incentive effect on the environmental performance of heavy polluting enterprises, and its positive incentive effect mainly plays a role through three channels: promoting green technology innovation, increasing government environmental supervision and enhancing executives' environmental awareness. Further research shows that environmental subsidies have a more significant promoting effect on environmental performance in non-state-owned enterprises and enterprises with high degree of financing constraints and high level of risk taking. Based on the perspective of environmental benefits of micro enterprises, this paper not only provides direct evidence at the micro level for the implementation effect of government environmental subsidies, but also provides a reference basis for the government to improve the specific implementation path of environmental subsidies. At the same time, it also provides reference for the government to implement directional regulation and accurate implementation of policies according to the particularity of enterprises with different characteristics.

Environmental Regulations, Environmental Subsidies and Enterprise Investment for Environmental Protection: Evidence from Pollution Enterprises of China

Environmental protection concerns the global and long-term development of the social economy. The negative effects of production and management activities of pollution enterprises on the environment attract more and more attention from the whole society. The government is not only continuously strengthening production regulation, responsibility monitoring and establishment of rules and regulations of pollution enterprises, but also increasing supports to environmental-friendly development of pollution enterprises. To explore influences of environmental regulations and environmental subsidies on enterprise investment to environmental protection, influences of environmental subsidies under environmental regulations were discussed through the propensity matching using data of listed enterprises in China’s pollution industry from 2013 to 2019. Results demonstrate that environmental subsidies promote the growth of enterprise investment to environmental protection significantly and environmental regulations are the primary influencing factor. According to heterogeneity analysis, environmental subsidies have significant positive effects on the investment in environmental protection of state-owned enterprises and private enterprises. The quantity and amplitude of investment in environmental protection of state-owned enterprises are more prominent. Environmental subsidies significantly promote investment in environmental protection of enterprises where senior executives have a technological background, but they have no significant influences on enterprises where senior executives have no technological background. Conclusions have some policy significance: government urges pollution enterprises to increase investment in environmental protection and pursue sustainable development from perspectives of incentives (increasing economic subsidies) and pressure (developing collaborative effect of environmental regulation).

Impact of Environmental Subsidies on Environmental Technology Innovation of Polluting Enterprises

Environmental technology innovation plays an important role in solving pollution control problems. Under the background of the green development of the polluting industry, environmental subsidies have become an important financial instrument to make up for the lack of capital market. To explore the motivation of environmental technology innovation supported by environmental subsidies, using the data of listed polluting enterprises in China from 2013 to 2019, the impact of environmental subsidies on environmental technology patents of polluting enterprises was discussed from the perspective of selective industrial policies. Results show that environmental subsidies stimulate the total number of environmental technology patents and non-invention patents to increase significantly, showing the behavior characteristics of enterprises pursuing innovation quantity while ignoring quality. When enterprises expected to get more environmental subsidies, they make environmental technology patents to seek support. The above phenomenon is only significant in the state-owned enterprise group and senior executives group with a technical background in the group analysis results. The number of environmental technology invention patents of private enterprises increased significantly. The selective environmental subsidies policy stimulates the strategic innovation of enterprises, while the environmental technology invention patents representing substantive innovation and high-quality innovation are not improved significantly. The managerial implication of the conclusions is that the government should not only consider increasing environmental subsidies to polluting enterprises in the future but also should support better regulatory policies to improve the level of pollution prevention and control through environmental technology innovation.