Does environmental audit help to improve water quality? Evidence from the China National Environmental Monitoring Centre

As an essential re-supervision system of the environmental regulation, the environmental audit can help improve the quality of the ecological environment by correcting the deviation of local governments' environmental regulatory behavior. This study constructed a conceptual model of environmental audit affecting water quality, and empirically examined the effects and mechanism through the difference in difference (DID) regression and the mediating analysis. The panel data were collected from 76 cities covered by the surface water quality monitored by China Environmental Monitoring Station from 2006 to 2017. The results indicated that: (1) the overall effect of the environmental audit on the water quality was positive but not significant; (2) the environmental audit mainly encouraged local governments to strengthen superficial regulations with lower cost, more immediate and perceptible effects, but failed to promote the advanced regulation to reduce the pollution sources and fundamentally improve the water quality. On this basis, the policy implications were proposed that the environmental audit should be strengthened to further promote the advanced regulation and improve water quality constantly.