IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i20p5820-d278473.html
   My bibliography  Save this article

The Impact of Environmental Administrative Penalties on the Disclosure of Environmental Information

Author

Listed:
  • Xiangan Ding

    (School of Economics and Management, Dalian University of Technology, Dalian 116024, China)

  • Ying Qu

    (School of Economics and Management, Dalian University of Technology, Dalian 116024, China)

  • Mohsin Shahzad

    (School of Economics and Management, Dalian University of Technology, Dalian 116024, China)

Abstract

Stakeholders often have a significant interest in the disclosure of information by companies that have received environmental penalties. This study examines how environmental administrative penalties influence companies’ environmental disclosures. Using a sample of 316 manufacturing companies across three years in China, the regression results indicate that the level of voluntary environmental information disclosure (EID) is significantly positively affected by environmental penalties. For companies in heavily polluting industries, environmental penalties decrease their involuntary EID. Environmental penalties also reduce the quality of environmental information, which is mainly reflected in the weakening of the integrity, comprehensibility, and relevance of environmental information in corporate social responsibility (CSR) reports or environmental reports. These findings help us to understand the sustainability of corporate environmental responsibility in the context of environmental administrative penalties.

Suggested Citation

  • Xiangan Ding & Ying Qu & Mohsin Shahzad, 2019. "The Impact of Environmental Administrative Penalties on the Disclosure of Environmental Information," Sustainability, MDPI, vol. 11(20), pages 1-24, October.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:20:p:5820-:d:278473
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/20/5820/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/20/5820/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Qiang Li & Tian Li & Hongtao Chen & Erwei Xiang & Wenjuan Ruan, 2019. "Executives' excess compensation, legitimacy, and environmental information disclosure in Chinese heavily polluting companies: The moderating role of media pressure," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(1), pages 248-256, January.
    2. Steven Scalet & Thomas Kelly, 2010. "CSR Rating Agencies: What is Their Global Impact?," Journal of Business Ethics, Springer, vol. 94(1), pages 69-88, June.
    3. Lo, Kin & Ramos, Felipe & Rogo, Rafael, 2017. "Earnings management and annual report readability," Journal of Accounting and Economics, Elsevier, vol. 63(1), pages 1-25.
    4. Rob Gray & Mohammed Javad & David M. Power & C. Donald Sinclair, 2001. "Social and Environmental Disclosure and Corporate Characteristics: A Research Note and Extension," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 28(3‐4), pages 327-356, April.
    5. Jayne Godfrey & Paul Mather & Alan Ramsay, 2003. "Earnings and Impression Management in Financial Reports: The Case of CEO Changes," Abacus, Accounting Foundation, University of Sydney, vol. 39(1), pages 95-123, February.
    6. Mark H. Lang & Russell J. Lundholm, 2000. "Voluntary Disclosure and Equity Offerings: Reducing Information Asymmetry or Hyping the Stock?," Contemporary Accounting Research, John Wiley & Sons, vol. 17(4), pages 623-662, December.
    7. Haniffa, R.M. & Cooke, T.E., 2005. "The impact of culture and governance on corporate social reporting," Journal of Accounting and Public Policy, Elsevier, vol. 24(5), pages 391-430.
    8. Dayuan Li & Min Huang & Shenggang Ren & Xiaohong Chen & Lutao Ning, 2018. "Environmental Legitimacy, Green Innovation, and Corporate Carbon Disclosure: Evidence from CDP China 100," Journal of Business Ethics, Springer, vol. 150(4), pages 1089-1104, July.
    9. Nicole Darnall & Irene Henriques & Perry Sadorsky, 2010. "Adopting Proactive Environmental Strategy: The Influence of Stakeholders and Firm Size," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1072-1094, September.
    10. Baginski, Stephen P & Hassell, John M & Hillison, William A, 2000. "Voluntary Causal Disclosures: Tendencies and Capital Market Reaction," Review of Quantitative Finance and Accounting, Springer, vol. 15(4), pages 371-389, December.
    11. Charles Cho, 2009. "Legitimation Strategies Used in Response to Environmental Disaster: A French Case Study of Total SA's Erika and AZF Incidents," European Accounting Review, Taylor & Francis Journals, vol. 18(1), pages 33-62.
    12. Doris M. Merkl-Davies & Niamh Brennan & Stuart McLeay, 2011. "Impression management and retrospective sense-making in corporate narratives : a social psychology perspective," Open Access publications 10197/2900, Research Repository, University College Dublin.
    13. David Campbell, 2003. "Intra‐ and intersectoral effects in environmental disclosures: evidence for legitimacy theory?," Business Strategy and the Environment, Wiley Blackwell, vol. 12(6), pages 357-371, November.
    14. McKinstry, Sam, 1996. "Designing the annual reports of burton plc from 1930 to 1994," Accounting, Organizations and Society, Elsevier, vol. 21(1), pages 89-111, January.
    15. Barton, Jan & Mercer, Molly, 2005. "To blame or not to blame: Analysts' reactions to external explanations for poor financial performance," Journal of Accounting and Economics, Elsevier, vol. 39(3), pages 509-533, September.
    16. van der Laan Smith, Joyce & Adhikari, Ajay & Tondkar, Rasoul H., 2005. "Exploring differences in social disclosures internationally: A stakeholder perspective," Journal of Accounting and Public Policy, Elsevier, vol. 24(2), pages 123-151.
    17. Patten, Dennis M., 2002. "The relation between environmental performance and environmental disclosure: a research note," Accounting, Organizations and Society, Elsevier, vol. 27(8), pages 763-773, November.
    18. Kiljae Lee & Won-Yong Oh & Namhyeok Kim, 2013. "Social Media for Socially Responsible Firms: Analysis of Fortune 500’s Twitter Profiles and their CSR/CSIR Ratings," Journal of Business Ethics, Springer, vol. 118(4), pages 791-806, December.
    19. Mitchell A. Petersen, 2009. "Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 435-480, January.
    20. Denis Cormier & Michel Magnan & Barbara Van Velthoven, 2005. "Environmental disclosure quality in large German companies: Economic incentives, public pressures or institutional conditions?," European Accounting Review, Taylor & Francis Journals, vol. 14(1), pages 3-39.
    21. Noel Brown & Craig Deegan, 1998. "The public disclosure of environmental performance information—a dual test of media agenda setting theory and legitimacy theory," Accounting and Business Research, Taylor & Francis Journals, vol. 29(1), pages 21-41.
    22. Craig Deegan & Michaela Rankin & Peter Voght, 2000. "Firms' Disclosure Reactions to Major Social Incidents: Australian Evidence," Accounting Forum, Taylor & Francis Journals, vol. 24(1), pages 101-130, March.
    23. Kimberly D. Elsbach & Robert I. Sutton & Kristine E. Principe, 1998. "Averting Expected Challenges Through Anticipatory Impression Management: A Study of Hospital Billing," Organization Science, INFORMS, vol. 9(1), pages 68-86, February.
    24. X. Meng & S. Zeng & C. Tam, 2013. "From Voluntarism to Regulation: A Study on Ownership, Economic Performance and Corporate Environmental Information Disclosure in China," Journal of Business Ethics, Springer, vol. 116(1), pages 217-232, August.
    25. Neu, D. & Warsame, H. & Pedwell, K., 1998. "Managing public impressions: environmental disclosures in annual reports," Accounting, Organizations and Society, Elsevier, vol. 23(3), pages 265-282, April.
    26. Rob Gray & Mohammed Javad & David M. Power & C. Donald Sinclair, 2001. "Social and Environmental Disclosure and Corporate Characteristics: A Research Note and Extension," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 28(3-4), pages 327-356.
    27. Aerts, Walter & Cormier, Denis & Magnan, Michel, 2008. "Corporate environmental disclosure, financial markets and the media: An international perspective," Ecological Economics, Elsevier, vol. 64(3), pages 643-659, January.
    28. Brian Rutherford, 2003. "Obfuscation, Textual Complexity and the Role of Regulated Narrative Accounting Disclosure in Corporate Governance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 7(2), pages 187-210, June.
    29. Al-Tuwaijri, Sulaiman A. & Christensen, Theodore E. & Hughes, K. II, 2004. "The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equations approach," Accounting, Organizations and Society, Elsevier, vol. 29(5-6), pages 447-471.
    30. Doris M. Merkl‐Davies & Niamh M. Brennan & Stuart J. McLeay, 2011. "Impression management and retrospective sense‐making in corporate narratives," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 24(3), pages 315-344, March.
    31. Li, Feng, 2008. "Annual report readability, current earnings, and earnings persistence," Journal of Accounting and Economics, Elsevier, vol. 45(2-3), pages 221-247, August.
    32. Denis Cormier & Michel Magnan, 2015. "The Economic Relevance of Environmental Disclosure and its Impact on Corporate Legitimacy: An Empirical Investigation," Business Strategy and the Environment, Wiley Blackwell, vol. 24(6), pages 431-450, September.
    33. Leung, Sidney & Parker, Lee & Courtis, John, 2015. "Impression management through minimal narrative disclosure in annual reports," The British Accounting Review, Elsevier, vol. 47(3), pages 275-289.
    34. Doris M. Merkl-Davies & Niamh Brennan, 2007. "Discretionary disclosure strategies in corporate narratives : incremental information or impression management?," Open Access publications 10197/2907, Research Repository, University College Dublin.
    35. Beck, A. Cornelia & Campbell, David & Shrives, Philip J., 2010. "Content analysis in environmental reporting research: Enrichment and rehearsal of the method in a British–German context," The British Accounting Review, Elsevier, vol. 42(3), pages 207-222.
    36. Blanca L. Delgado‐Márquez & Luis Enrique Pedauga, 2017. "Environmental Behavior and MNEs: A Strategy Pulled by Stakeholder Engagement," Business Strategy and the Environment, Wiley Blackwell, vol. 26(7), pages 927-939, November.
    37. Sheng Yao & Shiyi Li, 2018. "Distance and government resource allocation: from the perspective of environmental information disclosure policy change," Applied Economics, Taylor & Francis Journals, vol. 50(54), pages 5893-5902, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shujun Chao & Shanyong Wang & Haidong Li & Shu Yang, 2023. "The power of culture: Does Confucian culture contribute to corporate environmental information disclosure?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2435-2456, September.
    2. Jingchen Zhao, 2021. "Reimagining Corporate Social Responsibility in the Era of COVID-19: Embedding Resilience and Promoting Corporate Social Competence," Sustainability, MDPI, vol. 13(12), pages 1-28, June.
    3. Heiko Thimm & Karsten Boye Rasmussen, 2021. "Website disclosure of environmental compliance management—the case of European production companies," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 11(4), pages 648-670, December.
    4. Youtang Zhang & Hagos Mesfin Berhe, 2022. "The Impact of Green Investment and Green Marketing on Business Performance: The Mediation Role of Corporate Social Responsibility in Ethiopia’s Chinese Textile Companies," Sustainability, MDPI, vol. 14(7), pages 1-24, March.
    5. Khaddage-Soboh, Nada & Yunis, Manal & Imran, Muhammad & Zeb, Faheem, 2024. "Sustainable practices in Malaysian manufacturing: The influence of CSR, transformational leadership, and green organizational culture on environmental performance," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 753-768.
    6. Mketo, Ally Rajab & Ringo, Cliford J. & Nuhu, Said & Mpambije, Chakupewa Joseph, 2022. "Enhancing community participation for environmental health improvement in rural Tanzania: Evidence from Bukombe district," Evaluation and Program Planning, Elsevier, vol. 94(C).
    7. Xiaopeng Wang & Xueyao Shen & Yongliang Yang, 2020. "Does Environmental Information Disclosure Make Firms’ Investments More Efficient? Evidence from Measure 2007 of Chinese A-Listed Companies," Sustainability, MDPI, vol. 12(5), pages 1-16, March.
    8. Mansour Alyahya & Meqbel Aliedan & Gomaa Agag & Ziad H. Abdelmoety, 2022. "Exploring the Link between Sustainable Development Practices, Institutional Pressures, and Green Innovation," Sustainability, MDPI, vol. 14(21), pages 1-15, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiaohua Meng & Saixing Zeng & Xuemei Xie & Hailiang Zou, 2019. "Beyond symbolic and substantive: Strategic disclosure of corporate environmental information in China," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 403-417, February.
    2. Leung, Sidney & Parker, Lee & Courtis, John, 2015. "Impression management through minimal narrative disclosure in annual reports," The British Accounting Review, Elsevier, vol. 47(3), pages 275-289.
    3. Emerald Edem Welbeck & Godfred Matthew Yaw Owusu & Rita Amoah Bekoe & John Amoah Kusi, 2017. "Determinants of environmental disclosures of listed firms in Ghana," International Journal of Corporate Social Responsibility, Springer, vol. 2(1), pages 1-12, December.
    4. X. Meng & S. Zeng & C. Tam & X. Xu, 2013. "Whether Top Executives’ Turnover Influences Environmental Responsibility: From the Perspective of Environmental Information Disclosure," Journal of Business Ethics, Springer, vol. 114(2), pages 341-353, May.
    5. Doris M. Merkl-Davies & Niamh M. Brennan, 2011. "A conceptual framework of impression management: new insights from psychology, sociology and critical perspectives," Accounting and Business Research, Taylor & Francis Journals, vol. 41(5), pages 415-437, December.
    6. Sónia Maria da Silva Monteiro & Beatriz Aibar‐Guzmán, 2010. "Determinants of environmental disclosure in the annual reports of large companies operating in Portugal," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 17(4), pages 185-204, July.
    7. Bouten, Lies & Everaert, Patricia & Van Liedekerke, Luc & De Moor, Lieven & Christiaens, Johan, 2011. "Corporate social responsibility reporting: A comprehensive picture?," Accounting forum, Elsevier, vol. 35(3), pages 187-204.
    8. Rongbing Huang & Yubo Huang, 2020. "Does Internal Control Contribute to a Firm’s Green Information Disclosure? Evidence from China," Sustainability, MDPI, vol. 12(8), pages 1-23, April.
    9. Beck, A. Cornelia & Campbell, David & Shrives, Philip J., 2010. "Content analysis in environmental reporting research: Enrichment and rehearsal of the method in a British–German context," The British Accounting Review, Elsevier, vol. 42(3), pages 207-222.
    10. Niamh Brennan & Encarna Guillamon-Saorin & Aileen Pierce, 2009. "Impression management : developing and illustrating a scheme of analysis for narrative disclosures – a methodological note," Open Access publications 10197/2905, Research Repository, University College Dublin.
    11. Kshitij Khanna & Helen Irvine, 2018. "Communicating the Impact of the Global Financial Crisis in Annual Reports: A Study of Australian NGOs," Australian Accounting Review, CPA Australia, vol. 28(1), pages 109-126, March.
    12. X. Meng & S. Zeng & C. Tam, 2013. "From Voluntarism to Regulation: A Study on Ownership, Economic Performance and Corporate Environmental Information Disclosure in China," Journal of Business Ethics, Springer, vol. 116(1), pages 217-232, August.
    13. Saverio Bozzolan & Charles Cho & Giovanna Michelon, 2015. "Impression Management and Organizational Audiences: The Fiat Group Case," Journal of Business Ethics, Springer, vol. 126(1), pages 143-165, January.
    14. Niamh Brennan & Doris M. Merkl-Davies, 2013. "Accounting Narratives and Impression Management," Open Access publications 10197/4949, Research Repository, University College Dublin.
    15. Dolores Gallardo-Vázquez & María J. Barroso-Méndez & María L. Pajuelo-Moreno & Julio Sánchez-Meca, 2019. "Corporate Social Responsibility Disclosure and Performance: A Meta-Analytic Approach," Sustainability, MDPI, vol. 11(4), pages 1-33, February.
    16. Jean-Noël Chauvey & Sophie Giordano-Spring & Charles Cho & Dennis Patten, 2015. "The Normativity and Legitimacy of CSR Disclosure: Evidence from France," Journal of Business Ethics, Springer, vol. 130(4), pages 789-803, September.
    17. Muttakin, Mohammad Badrul & Khan, Arifur, 2014. "Determinants of corporate social disclosure: Empirical evidence from Bangladesh," Advances in accounting, Elsevier, vol. 30(1), pages 168-175.
    18. Tzu-Kuan Chiu & Yi-Hsin Wang, 2015. "Determinants of Social Disclosure Quality in Taiwan: An Application of Stakeholder Theory," Journal of Business Ethics, Springer, vol. 129(2), pages 379-398, June.
    19. Tiffany Cheng-Han Leung & Robin Stanley Snell, 2021. "Strategies for Social and Environmental Disclosure: The Case of Multinational Gambling Companies," Journal of Business Ethics, Springer, vol. 168(3), pages 447-467, January.
    20. Charles H. Cho & Matias Laine & Robin W. Roberts & Michelle Rodrigue, 2018. "The Frontstage and Backstage of Corporate Sustainability Reporting: Evidence from the Arctic National Wildlife Refuge Bill," Journal of Business Ethics, Springer, vol. 152(3), pages 865-886, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:20:p:5820-:d:278473. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.