Impact of Corporate Governance on Environmental Protection Investment of China's Listed Enterprises in High-polluting Industry

Abstract

With the rapid development of the economy, people's pursuit of the quality of life is getting higher. Thus, environmental pollution will be punished, and the high-polluting industry will face more problems in development. To explore the impact of corporate governance on environmental protection investment, 28 listed enterprises in high-polluting industry in China were selected as samples. Corporate governance was reflected from four aspects as explaining variables including shareholding structure, board composition, characteristics of the supervisory board and executive incentive. The relationship between corporate governance and high-polluting enterprises' environmental protection investment was analysed by using the data of China's listed enterprises in the high-polluting industry from 2015 to 2019. The results indicate that there is a positive correlation between legal person proportion and environmental protection investment of high-polluting enterprises, and a U-shaped relationship of the Herfindahl index. There is a significant positive correlation between board size and environmental protection investment of high-polluting enterprises, and the relationship is significantly negative of the size of the board of supervisors. The conclusions are helpful to improve the corporate governance of high-polluting enterprises, to enhancing environmental protection investment.