The Impact of the New Environmental Protection Law on the Leverage Manipulation Behavior of Heavy Polluters

DOI

10.2991/978-94-6463-408-2_65How to use a DOI?

Keywords

new EPA; heavy polluters; leverage manipulation behavior; regulatory uncertainty

Abstract

The new Environmental Protection Law effectively improves China's environmental governance level but also increases enterprises’ sewage costs and operating expenses, which may increase the incentives for leveraged manipulation behavior. This paper explores the impact of the introduction of the new Environmental Protection Law on the leverage manipulation behavior of heavily polluting enterprises by using the double difference model (DID) with the data of China's A-share non-financial listed companies from 2010 to 2021. It is found that the introduction of the new Environmental Protection Law has significantly exacerbated the leverage manipulation behavior of heavy polluters. At the same time, the introduction of the new Environmental Protection Law has a stronger exacerbating effect on the leverage manipulation behavior of heavy polluters in the presence of increased regulatory uncertainty. Heterogeneity analysis shows that the introduction of the new Environmental Protection Law will further exacerbate corporate leverage manipulation under the condition that executives do not have political affiliation and the green background; tax incentives can alleviate the exacerbating effect of the new Environmental Protection Law on corporate leverage manipulation, while the new Environmental Protection Law significantly exacerbates the leverage manipulation of corporations under the condition of more government subsidies. Finally, based on the above findings, this paper puts forward policy recommendations for the relevant departments to formulate policies and regulate the leverage manipulation behavior of heavily polluting enterprises.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Jiangyi Guo
PY  - 2024
DA  - 2024/05/07
TI  - The Impact of the New Environmental Protection Law on the Leverage Manipulation Behavior of Heavy Polluters
BT  - Proceedings of the 9th International Conference on Financial Innovation and Economic Development (ICFIED 2024)
PB  - Atlantis Press
SP  - 575
EP  - 589
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-408-2_65
DO  - 10.2991/978-94-6463-408-2_65
ID  - Guo2024
ER  -