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

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.

Understanding the Gap between Environmental Intention and Pro-Environmental Behavior towards the Waste Sorting and Management Policy of China

“…It is worth mentioning that the measures that combine rewards and punishments have been implemented to varying degrees in cities. In many cities, although local governments have issued relevant regulations and clarified punishment rules [ 26 ], relevant law enforcement agencies or departments have not strictly enforced them for various reasons.…”

أثر جودة هیکل الرقابة الداخلیة على الأداء المالی للشرکات "دراسة تطبیقیة علی الشرکات المقیدة فى البورصة المصریة" (باللغة الإنجلیزیة)

“…This measure was selected since it is one of the most important indicators in financial reports representing the company's after-tax profit per share. It is a relatively objective and direct ratio indicator that measures corporate profitability and can better reflect operating conditions (Yang, Gan, Su, 2020;Al Thuneibat et al, 2013 andPaul, 2015)…”

Redistribution of China’s Green Credit Policy among Environment-Friendly Manufacturing Firms of Various Sizes: Do Banks Value Small and Medium-Sized Enterprises?

“…Regarding economic development, the supported environment-friendly manufacturing enterprises can grow rapidly due to the availability of abundant financial resources. Thus, traditional enterprises will change their business models into ecological friendly models, and environment-friendly manufacturing start-ups will be established; consequently, ecological products and services will be enriched, and a new area of economic growth will be discovered [15,24,25].…”