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How does mandatory environmental regulation affect corporate environmental information disclosure quality

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  • Liu, Guangqiang
  • Guo, Liangju

Abstract

We utilize the environment fee to tax reform implemented in 2018 as a quasi-experiment, to investigate the impact of mandatory environmental regulation change on firm environmental information disclosure quality. Using data from listed companies in China between 2015 and 2020, we found that the mandatary environment regulation positively affects the monetary and non-monetary environmental information disclosure in heavy polluting industries. The mechanism analysis shows that external governance and internal control mediate the effect of mandatory environmental regulation on environmental information disclosure quality. We also found that, firms with low market values and no environmental subsidies disclosed more information due to environmental taxes.

Suggested Citation

  • Liu, Guangqiang & Guo, Liangju, 2023. "How does mandatory environmental regulation affect corporate environmental information disclosure quality," Finance Research Letters, Elsevier, vol. 54(C).
    • Handle: RePEc:eee:finlet:v:54:y:2023:i:c:s1544612323000764
    DOI: 10.1016/j.frl.2023.103702
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    References listed on IDEAS

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    5. Alexander, Anna & De Vito, Antonio & Menicacci, Luca, 2024. "At what cost? Environmental regulation and corporate cash holdings," Finance Research Letters, Elsevier, vol. 61(C).
    6. Zhang, Hua & Lai, Jie & Kang, Chenyi, 2024. "Green signalling under environmental pressure: Does local government environmental regulatory pressure promote corporate environmental information disclosure?," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 813-844.
    7. Ma, Xuejiao & Che, Tianqi & Sun, Xiaohua, 2024. "A carbon information disclosure perspective on carbon premium: Evidence from China," Journal of Business Research, Elsevier, vol. 173(C).
    8. Li, Xueqin & Zheng, Zhuoji & Luo, Beier & Shi, Daqian & Han, Xianfeng, 2024. "The impact of electricity sales side reform on energy technology innovation: An analysis based on SCP paradigm," Energy Economics, Elsevier, vol. 136(C).
    9. Liu, Changyu & Wang, Jing & Ji, Qiang & Zhang, Dayong, 2024. "To be green or not to be: How governmental regulation shapes financial institutions' greenwashing behaviors in green finance," International Review of Financial Analysis, Elsevier, vol. 93(C).

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