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Confession or justification: The effects of environmental disclosure on corporate green innovation in China

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  • Xiaojian Xiang
  • Chuanjiang Liu
  • Mian Yang
  • Xiaomeng Zhao

Abstract

As one type of voluntary environmental regulations, environmental disclosure plays an important role in promoting sustainable development of enterprises by enhancing their environmental awareness. Based on the social responsibility and annual reports published by heavily polluting listed companies in China between 2007 and 2016, this article investigates their environmental disclosure and assesses the impact on their green innovation activities as well as its influence mechanisms. Text analysis is used to measure the environmental disclosure by way of three dimensions including environmental investment and management, environmental supervision and agency certification, and environmental performance and governance. The results of the Poisson regression model for panel data show that environmental disclosure has significantly encouraged green innovations carried out by heavily polluting listed companies in China during the past decade and this result is consistent with a variety of robustness checks. Besides, the mediation effect test demonstrates that environmental disclosure stimulated green innovations of heavily polluting listed companies by expanding their financing channels, promoting their product sales, and raising media attention.

Suggested Citation

  • Xiaojian Xiang & Chuanjiang Liu & Mian Yang & Xiaomeng Zhao, 2020. "Confession or justification: The effects of environmental disclosure on corporate green innovation in China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2735-2750, November.
    • Handle: RePEc:wly:corsem:v:27:y:2020:i:6:p:2735-2750
    DOI: 10.1002/csr.1998
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