Empirical Study on the Impact of Government Environmental Subsidies on Environmental Performance of Heavily Polluting Enterprises Based on the Regulating Effect of Internal Control

Abstract

At present, China’s economy is developing rapidly; however, at the same time, it is also bringing more and more serious environmental problems. Although many laws have been established in the country to limit pollution by enterprises—and enterprises are actively saving energy and reducing pollution—the situation is still not optimistic. In 2016, there were 35 cities across the country that exceeded the annual average air quality standard; these regions have been plagued by haze for a long time, which seriously threatens people’s health and sustainable social and economic development. Therefore, while pursuing economic benefits and realizing greater value, importance must be attached to environmental performance, especially for enterprises with serious pollution. Using the panel regression analysis method, based on the data of enterprises from 2010 to 2019, this paper empirically analyzes the effects of government environmental protection subsidies and internal control quality on the environmental performance of heavily polluting enterprises, and verifies the nonlinear critical effect of government subsidies and internal control on environmental performance. In addition, this paper also uses the intermediate effect model to verify the mechanism by which environmental subsidies impact the environmental performance of heavily polluting enterprises. Through the empirical analysis, the effects of environmental protection subsidies and internal control on the environmental performance of enterprises with serious pollution are obtained. In the process of environmental subsidy affecting the environmental performance of heavy-polluting enterprises, internal control plays a key intermediary role. In addition, environmental subsidies and internal controls have a certain impact on the environmental performance of heavily polluting enterprises. Through the empirical analysis, it is concluded that there are obvious differences between government subsidies and internal control on the environmental governance effects of heavily polluting enterprises in different regions and with different property rights. Among them, the environmental protection subsidies have the greatest impact on pollution degree in the central region, followed by the eastern region; in the western region, it is not obvious. Secondly, the incentive effect of government environmental subsidies on state-owned enterprises with serious environmental pollution is better than the environmental governance effect of non-state-owned enterprises.