|
|
|
| Environmental Regulation, Green Technology Innovation and Default Risk |
| Wei Xiaoyun, Han Liyan
|
School of Statistics, Capital University of Economics & Business;
School of Economics and Management, Beihang University;
Beijing Institute of Mathematical Sciences & Applications |
|
|
|
Abstract Environmental regulation refers to the policies, regulations and strategic measures taken by a country to limit or eliminate pollution for the purpose of environmental protection. It is a method for the government to solve the “market failure” of environmental problems. From the scientific outlook on development to the strategic deployment of the two-carbon goal, the intensity of China's environmental regulation continues to increase. Data from the Ministry of Ecology and Environment of the People's Republic of China show that more than 119 new or revised environmental pollution control standards have been issued since 2010. In January 2015, the New Environmental Protection Law was implemented. At the end of 2017, China launched carbon emissions trading. On January 1, 2018, the environmental protection tax was officially levied. In March 2018, the Ministry of Ecology and Environment of the People's Republic of China was established to promote environmental protection and climate change policies. In 2020, the Central Economic Work Conference listed “carbon peak and carbon neutral” as a key task, and the scope of environmental regulation was further expanded from heavily polluting industries to industries with high energy consumption and high emissions. At the same time, it is also supplemented by special actions such as environmental protection management, special supervision,to promote the implementation of policies.Therefore, system design, comprehensive deployment and continuous strengthening of environmental regulation have become an inevitable trend.
In the financial sector, central banks and financial institutions have also reached a consensus: environmental and climate risks will lead to financial risks, and financial institutions must strengthen environmental and climate risk supervision. In 2017, eight regulatory departments, including the People's Bank of China, jointly initiated the establishment of the Central Banks and Supervisors Network for Greening the Financial System (NGFS), which is dedicated to monitoring and studying the impact of environmental and climate factors on financial risks. In 2019, the organization officially proposed that climate change is the source of financial risks.
China's bond market has experienced frequent defaults in recent years.Are environmental regulations a cause of the subsequent defaults in the bond market？ If so, what are the mechanisms that trigger default risk？ Is there a viable solution？ The impact of environmental regulations on default risk has not been discussed deeply. Green technology innovation plays an important role in the transmission process of environmental regulation to default risk. On the one hand, green technology innovation, like ordinary innovation, helps to improve product competitiveness and build competition barriers, thereby increasing enterprise value. It also helps to obtain external financing, thus reducing default risk. On the other hand, green technology innovation is a special technological innovation with environmental protection as an important goal, which may play an important role in the default risk caused by environmental regulations.
Based on bond default events, environmental policy stringency (EPS) index data proposed by OECD, and green patent data samples, this paper establishes a zero-inflation Poisson model to test the impact of environmental regulations on bond default risk and analyzes the risk inhibition effect of green technology innovation. The mechanism of the above influence is further explored from the perspective of cash holding and financing cost by a fixed effects model. The innovations of this paper are as follows: First, environmental regulation is included in the study of determinants of default risk. With a forward-looking perspective, this study enriches the understanding of bond default factors analysis, provides a basis for government policy prediction and policy formulation, and gives an important reference for enterprises and financial institutions to effectively prevent bond default risk. Second, from the perspective of cash depletion and financing cost, it reveals the channels through which environmental regulations affect default risk. Third, we test the risk inhibition effect of green technology innovation to provide strategic guidance for enterprises to cope with the upgrading of environmental regulations and to provide risk prediction guidance for bond market investors.
The research shows that environmental regulations increase cash depletion and financing costs of enterprises, thus increasing the default risk of debt-issuing enterprises. Green technology innovation has an important risk inhibition effect. In the process of environmental regulation upgrading, enterprises with green technology innovation have a lower default risk. After the enhancement of environmental regulations, green technology innovation can help alleviate the decline in net cash flow and the increase in financing costs. In this case, enterprises have more cash flow and lower bound premiums, which leads to a lower default risk.
The research findings in this paper have important policy implications for promoting green transformation, achieving high-quality development of “dual carbon” strategic goals, and deepening green finance. First, the bond approval department should pay more attention to the assessment of enterprises' environmental protection input before the bond issuance. It should strengthen the review and approval process of environmental impact assessments, conduct evaluations of green technologies. Second, bond issuers should strengthen green technology innovation, convert innovation into green and low-carbon productivity, invest in green technology from the perspective of dual-carbon goals, and continuously enhance technology to meet the requirements of green and low-carbon development.
|
|
Received: 02 September 2022
Published: 03 July 2024
|
|
|
|
|
| [1] |
陈国进、丁赛杰、赵向琴和蒋晓宇,2021,《中国绿色金融政策、融资成本与企业绿色转型——基于央行担保品政策视角》,《金融研究》第12期:第75～95页。
|
| [2] |
邓路、刘欢和侯粲然,2020,《金融资产配置与违约风险:蓄水池效应, 还是逐利效应？》,《金融研究》第7期,第172～189页。
|
| [3] |
杜龙政、赵云辉、陶克涛和林伟芬,2019,《环境规制、治理转型对绿色竞争力提升的复合效应——基于中国工业的经验证据》,《经济研究》第10期,第106～120页。
|
| [4] |
韩超、孙晓琳、李静,2021a,《环境规制垂直管理改革的减排效应——来自地级市环保系统改革的证据》,《经济学(季刊)》第1期,第335～360页。
|
| [5] |
韩超、王震和田蕾,2021b,《环境规制驱动减排的机制:污染处理行为与资源再配置效应》,《世界经济》第8期,第82～105页。
|
| [6] |
蒋伏心、王竹君和白俊红,2014,《环境规制对技术创新影响的双重效应》,《中国工业经济》第7期,第44～55页。
|
| [7] |
李虹和邹庆,2018,《环境规制、资源禀赋与城市产业转型研究——基于资源型城市与非资源型城市的对比分析》,《经济研究》第11期,第182～198页。
|
| [8] |
李小平、卢现祥和陶小琴,2012,《环境规制强度是否影响了中国工业行业的贸易比较优势》, 《世界经济》第4期,第62～78页。
|
| [9] |
刘金科和肖翊阳,2022,《中国环境保护税与绿色创新:杠杆效应还是挤出效应？》,《经济研究》第1期,第72～88页。
|
| [10] |
马九杰、郭宇辉和朱勇,2004,《县域中小企业贷款违约行为与信用风险实证分析》,《管理世界》第5期,第58～66+87页。
|
| [11] |
马骏,2020,《金融机构环境风险分析的意义, 方法和推广》,《清华金融评论》第9期,第17～20页。
|
| [12] |
孟庆斌、侯粲然和鲁冰,2019,《企业创新与违约风险》,《世界经济》第10期,第169～192页。
|
| [13] |
陶锋、赵锦瑜和周浩,2021,《环境规制实现了绿色技术创新的“增量提质”吗》,《中国工业经济》第2期,第136～154页。
|
| [14] |
童健、刘伟和薛景,2016,《环境规制、 要素投入结构与工业行业转型升级》,《经济研究》第7期,第43～57页。
|
| [15] |
王博、李力和郝大鹏,2019,《货币政策不确定性、违约风险与宏观经济波动》,《经济研究》第3期,第119～134期。
|
| [16] |
王东静、张祥建和张景青,2009,《公司债务期限结构与违约风险》,《管理科学学报》第2期,第77～87+141页。
|
| [17] |
谢军和黄志忠,2014,《宏观货币政策和区域金融发展程度对企业投资及其融资约束的影响》,《金融研究》第11期,第64～78页。
|
| [18] |
原毅军和谢荣辉,2014,《环境规制的产业结构调整效应研究——基于中国省际面板数据的实证检验》,《中国工业经济》第8期,第57～69页。
|
| [19] |
Almeida, H., M. Campello, and M.S. Weisbach, 2004, “The Cash Flow Sensitivity of Cash”, The Journal of Finance, 59(4), pp.1777～1804.
|
| [20] |
Athari, S. A., 2024, “Global Economic Policy Uncertainty and Renewable Energy Demand: Does Environmental Policy Stringency Matter？ Evidence from OECD Economies”, Journal of Cleaner Production, 450, pp. 141865.
|
| [21] |
Botta, E., and T. Koz＇luk, 2014, “Measuring Environmental Policy Stringency in OECD Countries: A Composite Index Approach”, OECD Economics Department Working Papers, No. 1177.
|
| [22] |
Cai, L., J. Cui, and H. Jo, 2016, “Corporate Environmental Responsibility and Firm Risk”, Journal of Business Ethics, 139(3), pp.563～594.
|
| [23] |
Fard, A., S. Javadi, and I. Kim, 2020, “Environmental Regulation and The Cost of Bank Loans: International Evidence”, Journal of Financial Stability, 51, pp.100797.
|
| [24] |
Giesecke, K., F. Longstaff, S. Schaefer, and I. Strebulaev, 2011, “Corporate Bond Default Risk: A 150-year Perspective”, Journal of Financial Economics, 102, pp.233～250.
|
| [25] |
Giesecke, K., F.A. Longstaff, S. Schaefer, and I.A. Strebulaev, 2014, “Macroeconomic Effects of Corporate Default Crisis: A Long-term Perspective”, Journal of Financial Economics, 111(2), pp.297～310.
|
| [26] |
Ginglinger, E. and Q. Moreau, 2019, “Climate Risk and Capital Structure”, Université Paris-Dauphine Research Paper, No. 737/2021.
|
| [27] |
Hsu, P. H., H. H. Lee, A.Z. Liu, and Z. Zhang, 2015, “Corporate Innovation, Default Risk, and Bond Pricing”, Journal of Corporate Finance, 35, pp.329～344.
|
| [28] |
Huang, B., M.T. Punzi, and Y. Wu, 2021, “Environmental Regulation and Financial Stability: Evidence from Chinese Manufacturing Firms”, Journal of Banking & Finance, 136, pp.106396.
|
| [29] |
Kanas, A. and P. Molyneux, 2020, “Do Measures of Systemic Risk Predict U.S. Corporate Bond Default Rates？”, International Review of Financial Analysis, 71, pp.101553.
|
| [30] |
Kabir, M. N., Rahman, S., Rahman, M. A., and Anwar, M.,2021,“Carbon Emissions and Default Risk: International Evidence from Firm-level Data”, Economic Modelling, 103, pp.105617.
|
| [31] |
Lambert, D., 1992, “Zero-Inflated Poisson Regression, with an Application to Defects in Manufacturing”, Technometrics, 34(1), pp.1～14.
|
| [32] |
Ma, H. and L. Li, 2021, “Could Environmental Regulation Promote the Technological Innovation of China's Emerging Marine Enterprises？ Based on the Moderating Effect of Government Grants”, Environmental Research, 202, pp.111682.
|
| [33] |
Porter, M.E. and C. Van der Linde, 1995, “Toward a New Conception of the Environment-competitiveness Relationship”, Journal of Economic Perspectives, 9(4), pp.97～118.
|
| [34] |
Schneider, T.E., 2011, “Is Environmental Performance a Determinant of Bond Pricing？ Evidence from the US Pulp and Paper and Chemical Industries”, Contemporary Accounting Research, 28(5), pp.1537～1561.
|
| [35] |
Shih, Y. C., Y. Wang, R. Zhong, and Y.-M. Ma, 2021, “Corporate Environmental Responsibility and Default Risk: Evidence from China”, Pacifc-Basin Finance Journal, 68, pp.101596.
|
| [36] |
Subrahmanyam, M.G., D.Y. Tang, and S.Q. Wang, 2014, “Does the Tail Wag the Dog？: the Effect of Credit Default Swaps on Credit Risk”, The Review of Financial Studies, 27(10), pp.2927～2960.
|
| [37] |
Xiao, H,2022,“Environmental Regulation and Firm Capital Structure Dynamics”, Economic Analysis and Policy, 76, pp.770～787.
|
| [38] |
Zhang, D.,2021,“Does a Designed Financial System Impact Polluting Firms' Employment？ Evidence of an Experimental Economic Policy”, Finance Research Letters, 38, pp.101500.
|
|
|
|
