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

Author

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  • 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
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