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Does environmental information disclosure promote or prohibit financialization of non-financial firms? Evidence from China

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  • Guo, Chong
  • Jiang, Yalin
  • Yu, Fang
  • Wu, Yingyu

Abstract

This study investigates whether and how corporate environmental information disclosure influences financialization in non-financial companies. Using data from Chinese listed firms, we find that environmental information disclosure significantly reduces the financialization of nonfinancial firms. Based on signalling theory and resource constraint theory, additional analysis shows that environmental information disclosure boosts firms’ operating income and drives corporate research and development input, which inhibits corporate financialization. Furthermore, the heterogeneous results indicate that the impeding impact of environmental information disclosure is more pronounced for firms located in the eastern region and non-state-owned companies.

Suggested Citation

  • Guo, Chong & Jiang, Yalin & Yu, Fang & Wu, Yingyu, 2023. "Does environmental information disclosure promote or prohibit financialization of non-financial firms? Evidence from China," The Quarterly Review of Economics and Finance, Elsevier, vol. 92(C), pages 200-214.
    • Handle: RePEc:eee:quaeco:v:92:y:2023:i:c:p:200-214
    DOI: 10.1016/j.qref.2023.10.005
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    More about this item

    Keywords

    Environmental information disclosure; Corporate financialization; Operating income; Research and development input;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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