ArticlePublisher preview available

Does accountability audit of natural resource promote corporate environmental performance? An external supervision perspective

Authors:
Cailou Jiang
Cailou Jiang
Cailou Jiang
  • This person is not on ResearchGate, or hasn't claimed this research yet.
Rong Liu
Rong Liu
Rong Liu
  • This person is not on ResearchGate, or hasn't claimed this research yet.
Jie Han
Jie Han
Jie Han
  • This person is not on ResearchGate, or hasn't claimed this research yet.
Read publisher preview
Download citation
To read the full-text of this research, you can request a copy directly from the authors.

Abstract and Figures

By taking the pilot policy of Accountability Audit of Natural Resource (AANR) as a quasi-natural experiment, this paper examines the impacts of AANR on corporate environmental performance (CEP). The moderating effects of media supervision and the rule of law are also examined from an external supervision perspective. The results indicate that AANR significantly promotes CEP. Media supervision significantly weakens the promotion effects of AANR on CEP, and a higher level of rule of law significantly enhances the promotion effects of AANR on CEP. On further analysis, the impacts of AANR on CEP are found significant in coastal regions and in heavily polluting enterprises.
Figures - available from: Environment Development and Sustainability
This content is subject to copyright. Terms and conditions apply.
A preview of this full-text is provided by Springer Nature.
Learn more
Content available from Environment Development and Sustainability
This content is subject to copyright. Terms and conditions apply.
Vol.:(0123456789)
Environment, Development and Sustainability (2023) 25:9417–9438
https://doi.org/10.1007/s10668-022-02441-0
1 3
Does accountability audit ofnatural resource promote
corporate environmental performance? Anexternal
supervision perspective
CailouJiang1,2· RongLiu1· JieHan1
Received: 15 March 2022 / Accepted: 8 May 2022 / Published online: 4 June 2022
© The Author(s), under exclusive licence to Springer Nature B.V. 2022
Abstract
By taking the pilot policy of Accountability Audit of Natural Resource (AANR) as a quasi-
natural experiment, this paper examines the impacts of AANR on corporate environmental
performance (CEP). The moderating effects of media supervision and the rule of law are
also examined from an external supervision perspective. The results indicate that AANR
significantly promotes CEP. Media supervision significantly weakens the promotion effects
of AANR on CEP, and a higher level of rule of law significantly enhances the promotion
effects of AANR on CEP. On further analysis, the impacts of AANR on CEP are found
significant in coastal regions and in heavily polluting enterprises.
Keywords Accountability audit of natural resources· Corporate environmental
performance· Media supervision· Rule of law
1 Introduction
The reform and opening up of China’s economy has made remarkable achievements, but
the subsequent rapid growth model has caused serious environmental problems. How to
marry the targets of economic growth and environment protection has been a key issue
during China’s economic transformation. Local officials in China play a key role in this
economic growth through the allocation of large quantities of resources. Since GDP has
been used as a key indicator for developmental achievements (Li & Zhou, 2003), local
officials have paid more attention to economic growth than environmental protection, often
resulting in both excessive consumption of natural resources and high pollutant emis-
sions of enterprises. Additionally, due to the frequent asymmetric information structures
between government agencies, local officials may conceal fake environmental pollution
data to avoid accountability (Chao & Ma, 2020). This may indulge those enterprises that
* Cailou Jiang
jcL@nuist.edu.cn
1 Business School, Nanjing University ofInformation Science andTechnology, Nanjing210044,
China
2 Research Institute forEnvironment andHealth, Nanjing University ofInformation Science
andTechnology, Nanjing210044, China
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
... Similarly, the penalties imposed by the securities regulatory authorities increase the cost of violations by listed companies, effectively curbing violations, especially in the context of state-owned property rights, a high degree of marketization, and a weak legal environment [8]. However, simply improving the internal systems and strengthening the external legal regulations is not completely effective, and the incidence of corporate violations continues to grow [9]. Therefore, improving the governance of listed companies and constraining corporate violations have become urgent issues in promoting capital market reform. ...
Exploring the Impact of Digital Transformation on Corporate Violations in China’s A-Share Market
Article
Full-text available
  • Aug 2024
Illegal and irregular behavior restricts the development of listed companies. Digital technology provides new opportunities for corporate governance, including the management of corporate violations, and companies are utilizing the “digital express” to achieve organizational restructuring and innovations in governance. In this study, the aim was to clarify whether digital transformation can disincentivize corporate violations in an environment where legal constraints remain inadequate. Therefore, samples of China’s A-share-listed companies were used from 2013 to 2022, including a fixed-effects model to explore the impact of digital transformation on corporate violations. In this study, digital transformation is identified as significantly curbing the incidence of corporate violations. The moderating mechanism test shows that audit quality, analyst attention, and negative media reports all strengthen the inhibitory effect of digital transformation on corporate violations to varying degrees. Heterogeneity analysis identifies that the inhibitory effect of digital transformation on corporate violations is more pronounced in non-SOEs, large firms, and the manufacturing sector. In this study, the inhibitory effect of digital transformation on corporate violations is revealed, and the relevant literature on digital technology in the field of corporate governance is enriched, providing empirical references to promote the digital construction and healthy and compliant development of commercial enterprises.
View
... China has made remarkable economic achievements but faces increasing environmental and ecological destruction issues [3][4][5]. Fortunately, since the 18th CPC National Congress, the Chinese government has formulated a series of policies to continuously strengthen environmental regulation, such as green credit policy [6][7][8], emission trading system [9][10][11], accountability audit of natural resource [12,13], China's new environmental protection law (EPL) [14,15], and green tax reforms [16,17], which played an essential role in promoting the green transformation. However, the progress of the construction of ecological civilisation further exposes the environmental risks of enterprises. ...
The effect of environmental credit rating on audit fees: A quasi-natural experiment from China
Article
Full-text available
  • Feb 2024
Environmental credit rating (ECR) is a new policy that deeply integrates the construction of ecological civilisation and the social credit system in China; however, there is a paucity of research on the response of external auditors to the ECR. This study takes the environmental credit evaluation policy implementation as a quasi-natural experiment, using China’s A-share listed companies in heavily polluting industries from 2008 to 2019 as samples. We construct a heterogeneous timing difference-in-differences model to empirically explore the impact of ECR on audit fees. The results show that the ECR significantly reduces companies’ audit fees. Importantly, our analysis suggests that the ECR improves environmental information transparency and enhances sustainable operation ability, thereby reducing audit fees. Further analysis shows that the negative correlation between the ECR and audit fees is more obvious in non-state enterprises, in poor legal environments and low levels of trust. Our study provides scientific evidence for the economic consequences of the environmental credit evaluation policy and enriches the literature on the factors affecting audit fees. It has revelatory significance for China and other developing countries to implement and improve the environmental credit evaluation policies and better guide enterprises to fulfil their environmental responsibilities.
View
View
View
How does auditing outgoing officials' natural resource asset management policies affect carbon emission efficiency? Evidence from a debiased machine learning model
Article
  • Oct 2024
  • J CLEAN PROD
Reducing carbon emissions to improve environmental quality has been the Chinese government's unwavering dedication in recent years. Several policies have been implemented with the objective of driving carbon reduction. The implementation of the outgoing leadership natural resources audit policy has played a pivotal role in encouraging local government officials to prioritize both economic and environmental development in their pursuit of performance metrics. However, whether the implementation of this policy contributes to an enhancement in carbon emission efficiency requires further empirical validation. This study, utilizing panel data from 282 cities across China, explores the potential impact of the audit policy (specifically referring to the outgoing leadership natural resources asset audit policy, without ambiguity) on carbon emission efficiency through the application of a debiased machine learning model. The results of the study show that the audit policy has been crucial in greatly raising the regional level of carbon emission efficiency. Furthermore, mechanistic analysis results suggest that the audit policy can enhance regional carbon emission efficiency by influencing green innovation and raising government environmental awareness and green financial levels. Based on the heterogeneity analysis, the regions east of the Hu Line, cities with low levels of corruption, less stringent economic growth objectives, and areas with high levels of public environmental concern are the areas where auditing rules have the greatest influence on carbon emission efficiency. In conclusion, based on the comprehensive results of this study, a series of policy recommendations are presented to further advance China's efforts in carbon reduction, ultimately achieving a more sustainable balance between economic and environmental development objectives.
View
Delineating Non-Profit Organizations: Society, Sustainability and Accountability
Chapter
  • Aug 2024
Nonprofit Organizations (NPOs) play a crucial role in enhancing communities and the well-being of its inhabitants, thus serving the greater good. Therefore, NPOs have an essential reason of existence in the society. But, despite their significance, NPOs confront the difficulty of persuading the public that they effectively oversee the funding they obtain and are committed to fulfilling the purposes for which the organizations were established. Within this context, the current chapter utilises the method of critical review to delineate the elements necessary to facilitate NPOs’ sustainability and accountability. Drawing on the findings of the review, the analysis contributed a model, which illustrates the factors determine NPOs’ Accountability and Sustainability, along with the different stakeholder groups. The model suggests that NPOs must find effective strategies to support their funds and resources in order to close gaps and attain sustainability and accountability.
View
View
View
View
Auditing the Leader: The Impact of Targeting Local Officials’ Environmental Regulations on Innovation
Article
Full-text available
  • May 2024
This study investigates the impact of the “Officials’ Off-office Audit Based on Natural Resource Assets” (OABNRA) policy of China on the urban innovation level. While previous studies have found evidence of the “Porter effect” of targeting firms’ environmental regulation, the impact of targeting local officials’ environmental regulation on innovation remains unclear. Using Chinese city panel data from 2012 to 2019, we found that OABNRA significantly promotes the urban innovation level, and the promotion strengthens over time. In addition, air pollution governance is the channel of the impact of OABNRA on the urban innovation level. The industrial structure serves as a moderating the innovation effect of OABNRA. The innovation effect of OABNRA is heterogeneous in resource abundance, marketization, city tier, and off-office official type. Our findings provide important insights for policymakers on achieving economic development and environmental protection by targeting local officials’ environmental regulations.
View
Research on environmental regulation behavior among local government, enterprises, and consumers from the perspective of dynamic cost of enterprises
Article
Full-text available
  • Jan 2022
  • Environ Dev Sustain
Comprehensive behavioral research on environmental regulation is scarcer and critical in the presence of uncontrolled environmental degradation. Thus, this paper establishes a three-party evolution game from the perspective of enterprise’s dynamic cost, which is used to explore the environmental regulation behaviors among local government, enterprises, and consumers. Then we explain how the new model differs from the traditional model. Subsequently, the stability of equilibrium points is analyzed based on the Lyapunov stability theory. Taking snowflake brewery in China as a simulation case, the evolutionary behaviors are simulated and analyzed under different constraints. The results reveal that the local government plays an indispensable role in environmental regulation. Moreover, when the local government implements the environmental regulation policy with a certain probability, the behavioral strategy of game players in the dynamic system still cannot reach a stable state. Finally, we find that reasonable behavioral incentives for local governments help to build an effective mechanism that the ideal stable strategy can be achieved.
View
Impact of environmental investment and resource endowment on regional energy efficiency: evidence from the Yangtze River Economic Belt, China
Article
Full-text available
  • Jan 2022
  • ENVIRON SCI POLLUT R
As a key economic resource, energy plays an important and strategic role in the national economy. Conserving energy and improving energy efficiency are of great significance to the sustainable economic development of a country. Based on provincial panel data from 2006 to 2017 in the Yangtze River Economic Belt (YREB), this article set up two econometric models and applied the panel regression analysis techniques to examine the impact of environmental investment and resource endowment on energy efficiency, and the combined impact of environmental investment and resource endowment on energy efficiency, and tested fixed effects and random effects to obtain detailed and specific results. The results of the study are as follows: (1) resource endowment is significantly and negatively correlated with energy efficiency, and there exists a resource curse in terms of energy efficiency in YREB. (2) Current environmental investment has a catalytic effect on energy efficiency, and lagged environmental investment has a greater effect on energy efficiency improvement than current environmental investment. (3) Environmental investment can effectively reduce the negative impact of resource endowment on energy efficiency. The results of the study will help improve YREB’s energy efficiency and promote the coordinated development of economic development and resource conservation and environmental protection.
View
Media coverage, Environment Protection Law and environmental research and development: evidence from the Chinese-listed firms
Article
Full-text available
  • Aug 2021
  • Environ Dev Sustain
Environmental research and development (R&D) is an effective means to coordinate firms’ sustainable development and environmental protection. This study investigates the impact of media coverage on environmental R&D with the Environmental Protection Law’s exogenous shock in 2015 in China. The results show that both media coverage and the Environmental Protection Law significantly promote firms’ environmental R&D. Moreover, the Environmental Protection Law strengthens the positive effect of media coverage on firms’ environmental R&D, and the strengthening effect is more significant for firms with low internal control quality and in high-competition industry. Further researches suggest that environmental R&D fully mediates the relationship between media coverage and environmental technology innovation, while the Environment Protection Law has no significant effect on environmental technology innovation. The results demonstrate external supervision or regulations are conducive to environmental R&D, which conforms to Porter Hypothesis. This study has certain enlightening significance to firms’ environmental R&D, environmental technology innovation, and sustainable development in developing economies.
View
Assessing the impact of tradable discharge permit on pollution reduction and innovation: micro-evidence from Chinese industrial enterprises
Article
Full-text available
  • Nov 2021
  • Environ Dev Sustain
The impact of a tradable discharge permit system on pollution reduction, pollution intensity, and innovation depends on market perfection. To verify this assumption, this study matches China’s Industrial Enterprise Database with the Industrial Enterprise Pollution Emissions Database and applies the difference-in-difference-in-difference estimator for empirical analysis. The results show that implementing a tradable discharge permit policy can promote pollution reduction and pollution intensity reduction for pilot regions with a high degree of marketization. However, the implementation of a tradable discharge permit policy did not have a significant impact on innovation. This indicates that the Porter hypothesis was not valid during the sample period from 2000 to 2012 in China. Enterprises tend to achieve pollution abatement through end-of-pipe control or reduced output rather than through technological innovation. Moreover, high institutional transaction costs lead to a weak incentive effect of the tradable discharge permit system on promoting enterprise innovation. Furthermore, greater market power is conducive to corporate innovation in regions with a high degree of marketization. The results of a heterogeneity analysis show that the impact of a tradable discharge permit system differs by enterprise ownership and region. The findings have clear policy implications: the Chinese government should consider applying the hybrid approach by combining a tradable discharge permit system with a given emission standard and foster competition.
View
The effect of pollutant charges on economic and environmental performances: Evidence from Shandong Province in China
Article
Full-text available
  • Sep 2019
  • J CLEAN PROD
Environmental taxes can play an important role in reducing pollution issues. However, they also have an impact on the entire economy. This paper uses panel data from Shandong Province in China from 2005 to 2016 to analyze the impact of pollutant charges on the economic and environmental performances. The results show that the payment transfer of pollutant charges can influence the output but the effects varies with regions and time. Pollutant charges increase the resource utilization efficiency and promote economic growth. After controlling output and industry structure, pollutant charges on waste gas improve the air quality. This study confirms the existence of the environmental tax double dividend and provides a reference for new environmental protection taxes.
View
Does the “Miracle Drug” of Environmental Governance Really Improve Air Quality? Evidence from China’s System of Central Environmental Protection Inspections
Article
Full-text available
Central environmental protection inspections have completed their goal of full coverage of 31 provinces in China, and more than 17,000 officials have been held accountable. The media has evaluated the effectiveness of central environmental protection inspections using the notions of “instant results” and the “miracle drug of environmental governance.” Can this approach effectively promote local environmental governance? This paper takes the treatment effect of central environmental protection inspections on air pollution as an example. Using the method of regression discontinuity, central environmental protection inspections are found to have a positive effect on the air quality index (AQI), but this effect is only short term and unsustainable. Additionally, there are inter-provincial differences. Judging from the research results on sub-contaminants, the treatment effect of central environmental protection inspections on air pollution is mainly reflected in PM10, PM2.5 and CO. Under the current situation in which PM10 and PM2.5 are the main assessment indexes, this phenomenon indicates that due to the political achievements and promotion of local officials and for reasons of accountability, it is more effective for the central government to conduct specific environmental assessments through local governments than to conduct central environmental protection inspections.
View
Does financial risk and fiscal decentralization curb resources curse hypothesis in China? Analyzing the role of globalization
Article
  • Mar 2021
  • RESOUR POLICY
On the role of natural resources, extensive studies are available, especially in a country's financial development. However, earlier studies ignored the role of fiscal decentralization and improvement in financial risk index in interaction with natural resources rent. Therefore, this study attempts to investigate whether fiscal decentralization and improvement in financial risk index curb the resources curse hypothesis for China or not. For this purpose, quarterly data from 2005Q1-2016Q4 is employed using advanced time series econometric approaches that deal with multiple structural breaks. This study uses an updated indicator that covers the efficiency, depth, and accessibility of financial institutions and markets for financial development. The findings confirm China's resource curse hypothesis; however, increasing fiscal decentralization and financial risk index improvement avoid the resource curse hypothesis. Moreover, globalization, gross domestic product, fiscal decentralization, and financial risk index improvement positively affect financial development. The policy implications focus on increasing fiscal decentralization to effectively utilize natural resources and improve the financial risk index to avoid the resource curse hypothesis.
View
View
The driving force in corporate environmental governance: Turnover of environmental protection department directors as an indicator
Article
  • Apr 2020
Purpose Due to environmental externalities, micro-enterprises with profit-seeking features do not develop sufficient motivation for environmental governance. In a fiscally decentralized system, local environmental protection authorities perform environmental supervision, and the intensity of the regulations that they implement has an important influence on corporate environmental governance. Based on the promotion tournament framework, this paper aims to discuss the driving mechanism of corporate environmental governance using turnover of environmental protection department directors (EPDDs) as an indicator. Design/methodology/approach Using samples of A-share companies listed on the Shanghai and Shenzhen exchanges from 2007 to 2014, this paper examines the impact of EPDD turnover on corporate environmental governance and its underlying mechanism. Findings The results show that corporate environmental governance exhibits a political periodicity that changes with the turnover of the EPDD, and the periodicity remains after controlling for the influence of changes in provincial party secretary and governor. Internal mechanisms analysis indicates that, without financial independence, local environmental protection departments rely on increasing sewage charges, not environmental protection subsidies, to promote corporate environmental governance. Further, considering heterogeneity among officials, it finds that the younger a new EPDD is, the more pronounced the periodicity of corporate environmental governance. However, there is no significant difference between in-system and out-system turnover. Originality/value In general, this paper describes the mechanisms of corporate environmental governance from the perspective of political economics, and the results have implications for the potential improvement of the government’s environmental supervision functions and the development of ecological civilization in China.
View
Authoritarian environmentalism and environmental policy implementation in China
Article
  • Jun 2019
  • RESOUR CONSERV RECY
Policy implementation is essential to the effectiveness of environmental governance. Focusing on two types of policies in China, law derived environmental policies and plan derived environmental policies; this research analyzed the impact of the central government's rules, regulations, and mechanism for rewards/penalties on local governments’ policy implementation. The results indicate that local governments selectively implement environmental policies. This selective implementation effort is primarily determined by the authoritarian environmentalism and the target responsibility system imposed by the central government. Local governments focus their attention on the attitude of the central government toward that policy because the scope of its reward/penalty system provides a signaling effect for different policies. The central government's regulatory oversight of policy implementation has also increased the binding power of the incentive mechanism. China's environmental law or policy implementation should make the government work paramountly.
View