Internal Control Quality, Enterprise Environmental Protection Investment and Finance Performance: An Empirical Study of China’s A-Share Heavy Pollution Industry

Liu Yang, Han Qin, Quanxin Gan and Jiafu Su
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Liu Yang: School of International Education, Guangxi University of Finance and Economics, Nanning 530003, China
Han Qin: MPAcc Center, Guangxi University of Finance and Economics, Nanning 530003, China
Quanxin Gan: Admissions and Employment Office, Guangxi University of Finance and Economics, Nanning 530003, China
Jiafu Su: National Research Base of Intelligent Manufacturing Service, Chongqing Technology and Business University, Chongqing 400067, China

IJERPH, 2020, vol. 17, issue 17, 1-15

Abstract: As an important measure of enterprise governance, internal control can enhance the organizational rationality of the enterprise, ensure that the enterprise consciously assumes social responsibility for the protection of the natural environment and resources, and promote the sustainable development of the national economy. Using data from China’s A-share heavy pollution industry listed companies from 2009 to 2018, this study explored the relationships among internal control quality, enterprise environmental protection investment, and financial performance. The results show that the quality of internal control has a significant positive impact on enterprise environmental protection investment and financial performance. Enterprise environmental protection investment has a significant positive impact on financial performance and plays a partial intermediary role in the positive impact of internal control quality on financial performance. While expanding the theory of resource-based concepts, this study clarified the positive impact of corporate environmental management and practical behavior on corporate value and provides a theoretical basis for companies to actively implement environmental protection responsibilities, strengthen internal environmental management capabilities, and enhance corporate value. At the same time, it also provides a basis for the government to issue relevant environmental protection policies, strengthen enterprise internal control construction guidelines, and encourage third-party organizations to evaluate the effectiveness of enterprise internal control.

Keywords: environmental protection investment; internal control; financial performance; heavy pollution industry; environmental sustainability (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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