Environmental Performance and Financing Decisions Impact on Sustainable Financial Development of Chinese Environmental Protection Enterprises
Abstract
:1. Introduction
2. Literature Review and Proposed Hypotheses
2.1. The Relationship Between Financing Decisions and Economic Performance
2.2. The Relationship between Environmental Performance and Economic Performance
2.3. The Interactions of Financing Decisions and Environmental Performance on Economic Performance
3. Research Methodology
3.1. Data Collection and Variables Definition
3.2. Models Building
4. Results and Discussion
4.1. Empirical Results and Analysis
4.2. Tests of Hypotheses and Discussion
5. Conclusions and Policy Implications
Acknowledgments
Author Contributions
Conflicts of Interest
References
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Category | Variable | Symbol | Formula | |
---|---|---|---|---|
Dependent variable | Short-term performance | Return on Assets | ROA | Net income/Total Assets |
Long-term performance | Sustainable growth rate | SGR | Retained profits * net profit rate * (1 + debt/equity ratio) * [1/(total assets/total sales) − 1] | |
Independent variables | External debt financing | Total debt | TDR | Total debt/Total assets |
Short-term debt | SDR | Short-term debt/Total assets | ||
Long-term debt | LDR | Long-term debt/Total assets | ||
Internal financing | Retained earnings ratio | RET | (Retained earnings + provisions)/total assets | |
Environmental performance | Environmental performance | EP | Growth rate of environmental protection investment | |
Control variables | Profitability | Pro | Cash flow from operating activities/Total assets | |
Book to market | BtM | Book value/Market value at the end of the year | ||
Non-debt tax shield | Tax | Depreciation/Total assets | ||
Growth opportunities | Go | Growth rate of sales |
Construct/Variables | Mean | Std.Dev | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1. ROA | 0.226 | 4.690 | 1 | ||||||||||
2. SGR | 0.0295 | 0.471 | −0.078 | 1 | |||||||||
3. Tdr | 0.565 | 0.501 | −0.095 | −0.168 | 1 | ||||||||
4. Sdr | 0.399 | 0.524 | −0.085 | −0.288 | 0.705 | 1 | |||||||
5. Ldr | 0.101 | 0.125 | −0.033 | 0.047 | 0.067 | −0.156 | 1 | ||||||
6. EP | 0.0123 | 0.106 | −0.057 | 0.041 | 0.033 | 0.008 | 0.059 | 1 | |||||
7. Ret | 0.0187 | 0.629 | 0.182 | 0.124 | −0.064 | −0.074 | 0.046 | −0.127 | 1 | ||||
8. Pro | 0.0179 | 0.231 | 0.192 | −0.153 | −0.052 | −0.035 | −0.042 | −0.084 | −0.298 | 1 | |||
9. Btm | 0.910 | 0.829 | −0.024 | 0.014 | 0.144 | −0.005 | 0.471 | 0.097 | 0.032 | −0.024 | 1 | ||
10. Tax | 0.103 | 0.142 | −0.030 | 0.025 | −0.005 | 0.104 | −0.173 | −0.012 | 0.042 | −0.036 | −0.020 | 1 | |
11. Go | 1.219 | 16.457 | −0.005 | 0.032 | 0.045 | 0.049 | −0.026 | 0.017 | −0.014 | −0.005 | −0.024 | −0.036 | 1 |
Dependent Variable | ROA (Model 1) | SGR (Model 2) | ||
---|---|---|---|---|
Model | Fixed-Effects Regression | GMM | Fixed-Effects Regression | GMM |
Lagged values | 0.315 *** | 0.187 *** | ||
Tdr | −0.431 *** | −0.298 ** | −0.234 * | −0.744 *** |
Ep | −0.530 *** | −0.504 * | 1.133 | 0.924 |
Tdr * Ep | 1.043 *** | 0.965 ** | −2.089 * | −1.796 |
Ret * Ep | −0.198 *** | −0.450 * | −2.453 *** | −2.108 ** |
Ret | 0.105 *** | 0.239 * | 0.184 ** | −0.012 |
Pro | 0.182 | 0.025 | −9.681 *** | −11.312 *** |
Btm | 0.008 | −0.014 | −0.014 | −0.023 |
Tax | 0.079 * | 0.102 | 0.046 | −0.170 |
Go | 0.0193 *** | 0.0150 * | 0.107 *** | 0.147 ** |
R2 | 0.8076 | 0.4512 | ||
F a | 147.83 (0.000) | 30.70 (0.000) | ||
Hausman Test b | 213.77 (0.000) | 21.45 (0.010) | ||
Number of obs | 391 | 394 | ||
Number of instruments | 54 | 54 | ||
Wald chi2 c | 1088.55 (0.000) | 5095.96 (0.000) | ||
AR(1) test d | −1.081 (0.279) | −1.781 (0.074) | ||
AR(2) test | −0.843 (0.398) | −0.929 (0.352) | ||
Sargan test of over-identification e | 46.175 (0.342) | 50.716 (0.195) |
Dependent Variable | ROA (Model 3) | SGR (Model 4) | ||
---|---|---|---|---|
Model | Fixed-Effects Regression | GMM | Fixed-Effects Regression | GMM |
Lagged values | 0.477 *** | 0.178 *** | ||
Sdr | −0.413 *** | −0.198 | −0.556 *** | −0.700 *** |
Ldr | −0.013 | 0.136 *** | −0.022 | −0.0192 |
Ep | −0.273 *** | −0.074 | 0.807 | 1.295 * |
Sdr * Ep | 1.121 *** | 0.724 * | −1.620 | −2.481 * |
Ldr * Ep | −0.506 | −1.008 ** | −2.066 | −2.545 ** |
Ret * Ep | −0.253 *** | −0.598 *** | −1.928 ** | −2.679 *** |
Ret | 0.163 *** | 0.361 *** | −0.063 | −0.152 |
Pro | 0.645 *** | 0.467 *** | −9.013 *** | −10.803 *** |
Btm | −0.011 | −0.029 *** | −0.009 | 0.0002 |
Tax | 0.185 *** | 0.172 ** | 0.221 | 0.083 |
Go | 0.006 | 0.007 | 0.086 *** | 0.086 ** |
R2 | 0.777 | 0.511 | ||
F a | 101.01 (0.000) | 32.04 (0.000) | ||
Hausman Test b | 69.15 (0.000) | 26.35 (0.005) | ||
Number of obs | 394 | 397 | ||
Number of instruments | 56 | 56 | ||
Wald chi2 c | 2214.83 (0.000) | 3034.77 (0.000) | ||
AR(1) test d | −1.122 (0.261) | −1.606 (0.108) | ||
AR(2) test | 0.190 (0.848) | −0.961 (0.336) | ||
Sargan test of over-identification e | 48.265 (0.268) | 46.047 (0.347) |
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Zhang, K.Q.; Chen, H.H. Environmental Performance and Financing Decisions Impact on Sustainable Financial Development of Chinese Environmental Protection Enterprises. Sustainability 2017, 9, 2260. https://doi.org/10.3390/su9122260
Zhang KQ, Chen HH. Environmental Performance and Financing Decisions Impact on Sustainable Financial Development of Chinese Environmental Protection Enterprises. Sustainability. 2017; 9(12):2260. https://doi.org/10.3390/su9122260
Chicago/Turabian StyleZhang, Kai Quan, and Hsing Hung Chen. 2017. "Environmental Performance and Financing Decisions Impact on Sustainable Financial Development of Chinese Environmental Protection Enterprises" Sustainability 9, no. 12: 2260. https://doi.org/10.3390/su9122260