Can Financial Constraints and Regulatory Distance Reduce Corporate Environmental Irresponsibility?

As global environmental problems become increasingly severe, corporate social (environmental) responsibility has become a hot topic in research, but there is still a lack of clear understanding of corporate environmental irresponsibility behavior and the driving factors behind this behavior. Our research aims to reveal the factors affecting corporate environmental irresponsibility from both internal and external perspectives. Inside enterprises, financial constraints will affect the degree of capital adequacy and thus affect the environmental behavior of enterprises. Externally, the fulfillment of corporate environmental responsibility will be affected by external regulatory pressure. Taking 399 A-share listed companies in China's heavily polluting industries as the research objects, this paper empirically analyzes the influence paths and internal mechanisms of financial constraints and regulatory distance on corporate environmental irresponsibility, and it further divides regulatory distance into physical regulatory distance and power regulatory distance. This paper's findings show that both financial constraints and physical regulatory distance were positively correlated with corporate environmental irresponsibility in China, and that the positive correlation between physical regulatory distance and corporate environmental irresponsibility was more significant in non-state-owned enterprises. In addition, financial constraints and regulatory distance have a complementary effect on corporate environmental irresponsibility. These findings can reduce the environmental risks posed by enterprises and help them to avoid environmental irresponsibility.