The impact of the amount of environmental information disclosure on financial performance: The moderating effect of corporate internationalization

Abstract

Based on the data of A-share heavily polluting listed companies in China from 2010 to 2017, this study uses content analysis and multiple linear regression to investigate the effect of the amount of corporate environmental information disclosure on financial performance and the moderating effect of corporate internationalization on this relationship. The results confirm the significant negative impact of the amount of environmental information disclosure on financial performance, while corporate internationalization has a positive moderating effect on this relationship. The degree of regional marketization and corporate ownership influences this moderating effect. Thus, a mandatory disclosure mechanism with a legal basis and clear standards is necessary, but should include diverse policies and improved incentive mechanisms in light of the differences in regional development in China. In addition, international organizations should encourage companies to increase their international operations. The robustness test shows that the results are reliable.

The Impact of Directors’ Foreign Experience on Environmental Information Disclosure: Evidence from Heavily Polluting Chinese Firms

“…2020; Yang et al. 2020). Firms with more cash flow are more likely to invest in environmentally related activities.…”

“…We use content analysis to measure the EID with detailed information drawn from the firm's annual, semiannual, and CSR reports. We calculate EID based on the measurement method adopted by Wang et al (2013) and Yang et al (2020). They summarize EID into environmental, financial information (quantitative), and environmental, non-financial information (qualitative).…”

“…Therefore, these firms are more likely to disclose environmental information (de Villiers et al 2011). Firms with more resources and human capital are likely to comply with rules and regulations related to the environment; therefore, we control for firm size (Fan et al 2020;Yang et al 2020). Firms with more cash flow are more likely to invest in environmentally related activities.…”

The Impact of Environmental Information Disclosure on the Cost of Debt: Evidence From China

“…In this case, firms are not able to maximize their profits such that EID may have a negative impact on CFP (Palmer, Oates, and Portney 1995;Hou 2019). Yang, Yao, and Li. (2020) found that there is a negative link between EID and CFP, while corporate internationalization has a positive moderating effect on this relationship.…”

Does Environmental Information Disclosure Affect the Sustainable Development of Enterprises: The Role of Green Innovation

“…External factors mainly refer to the pressure of stakeholders, such as external supervision, institutional elements, and social organizations [15]. Third, from a micro-perspective, the authors of related literature have investigated the impact of EID on corporate financial performance [16][17][18][19], corporate risk [20], environmental performance [21][22][23], location choice [24], and innovation [25]. Whether environmental regulation policies can induce innovation has always been a hot topic of research, and their views are not uniform.…”