Promoting or Inhibiting? The impact of enterprise 1 environmental performance on economic performance: 2 Evidence from China's large iron and steel enterprises

: In recent years, people have realized the importance of corporate environmental responsibility. 10 In this study, we combine the Slack-based Measurement (SBM) model with the "Super-efficiency" model 11 to construct the environmental performance evaluation based on Data Envelopment Analysis (DEA) to 12 measure the environmental performance of China's large iron and steel enterprises from 2009 to 2017. 13 Then, it studies the impact of environmental performance on enterprise economic performance through 14 regression analysis. The results show that the impact of environmental performance of China's large iron 15 and steel enterprises on economic performance shows an inverted U-shaped relationship. The conclusion 16 is helpful to encourage enterprises to actively carry out environmental management, so as to maintain 17 and enhance the competitiveness of enterprises. Therefore, this paper suggests that iron and steel 18 enterprises should balance the relationship between environmental responsibility and economic 19 performance in order to maximize enterprise performance. The main purpose of this paper is to let 20 enterprises solve the negative externalities in production through internalization, and encourage 21 enterprises to adopt environmental protection behavior for production and operation.


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Green development is currently a hot issue that countries all over the world are paying attention to.

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Under the background of the dual pressures of economic growth and pollution control, it is vital to 26 achieve a win-win situation of "reducing pollution" and "increasing efficiency" at the same time. Socio-27 economic development requires enterprises to undertake environmental responsibilities while obtaining 28 economic benefits, so as to meet the environmental protection demands of stakeholders. How to strike a 29 balance between ecological environmental protection and economic development has become an 30 important issue for all sectors of society. enterprises has not been constrained by the shortage of existing resources, and enterprises aim at 135 maximizing profits, and their environmental performance and environmental responsibility have been 136 ignored. In the absence of traditional corporate responsibility, enterprises can gain an advantage in market 137 competition at low prices with low resources and at the expense of the environment. However, world 138 demand is shifting to products with low pollution and high energy efficiency. Many enterprises have 139 opened up new market spaces by producing "green" products. Those enterprises that adopted higher 140 environmental standards earlier have the first mover advantage, gaining product premiums and more 141 market share (Porter and Claas, 1995). Miles and Covin pointed out that good environmental initiatives 142 can create new opportunities for gaining a higher ecological reputation and benefit from premium pricing 143 and increased sales (Porter and Claas, 1995).

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By adopting an environmentally responsible approach, enterprises can meet the needs of 145 stakeholders who provide resources for enterprises, such as customers, shareholders, governments, consumers and community residents, so as to obtain the resources needed for enterprise development,

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found that there is a U-shaped nonlinear relationship between corporate environmental performance and environmental disclosure, and the relationship between environmental performance and financial they will improve their environmental performance, which will have a positive impact on their economic environmental performance of the enterprise has been further improved, under the condition that the resources of the enterprise are limited, it will inevitably cause the loss of production and financial resources of the enterprise, and the benefits generated by environmental performance cannot make up 179 for the loss. The cost of consumption, thereby reducing the economic performance of the enterprise.

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Therefore, we propose the following hypothesis: In model (1), it is assumed that there are n decision-making units, and each decision-making unit 253 has an input vector, an expected output vector and an undesired output vector. Assuming that there are 254 m types of inputs and q types of outputs, including q1 expected outputs and q2 undesired outputs, the 255 input vector is xR m , the expected output vector is yR q1 , and the undesired output vector is bR q2 .

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Where S represents the slack of input and output, Arepresents the input redundancy, A + represents the 257 expected output shortage, A brepresents the undesired output excess,  is the weight vector, and  258 represents the efficiency score.

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According to the research purpose and the situation of China's iron and steel industry, this paper 261 selects the following indicators, as shown in Table 1. Refers to the value of products produced using the "three wastes" (waste water, waste gas, and waste residue) as the main raw materials  We have calculated that 2010-2017 also has this characteristic. Therefore, it is reasonable for this paper 302 to separate the three wastes and pollutant discharge fees to measure the environmental performance of 303 iron and steel enterprises. It is possible to explore the mechanism of environmental performance on 304 economic performance in more detail, which is also one of the main contributions of this paper.

Model building
to make an empirical analysis of the above hypothesis, this paper uses the environmental panel data of environmental performance (EP) to measure corporate environmental responsibility, and on this basis,

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Through the control of the fixed effects of enterprises, we essentially explore how the economic 361 performance of enterprises in the same industry changes with changes in environmental performance.

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The specific regression results are shown in Table 4. The results show that: enterprise environmental 363 performance (EPt-1) has a significant positive correlation with return on assets (ROA), but the estimated 364 coefficient of the square term of enterprise environmental performance (EPt-1 2 ) is significantly negative.

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Therefore, there is a significant inverted U-shaped relationship between enterprise environmental 366 performance and return on assets. That is, in the initial stage, the continuous improvement of 367 environmental performance of iron and steel enterprises will improve the economic performance of 368 enterprises, but with the further improvement of environmental performance, when the environmental 369 performance exceeds the critical value, it will have a negative impact on economic performance. return on assets, and the result is not significant. While there is a negative correlation between enterprise 420 size and return on assets, but the result is not significant. It shows that the total operating cost, main 421 business income and asset-liability ratio have a significant promotion effect on the economic 422 performance of the enterprise, the factor endowment structure of the enterprise has no significant 423 promotion effect on the economic performance, and the scale of the enterprise has an inhibitory effect 424 on the economic performance but is not significant.

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The above analysis shows that the performance of environmental responsibilities by enterprises has 426 a non-linear effect on economic performance, and it also shows that the performance of environmental 427 responsibilities by enterprises has a lagging effect. This means that environmental management is a long-428 term investment process, and enterprises must weigh environmental performance and economic 429 performance at the same time, and establish long-term environmental strategies and plans.

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In order to test the robustness of the above regression results, this paper uses the dynamic system 432 GMM model and the two-stage least square method (2SLS) for robustness test.

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regression results using the two-stage least squares method and the environmental performance (EP) with 458 a lag of 2 years and a lag of 3 years as instrumental variables are shown in Table 6.