Environmental Disclosure, Investors’ Investment Decisions And Their Perceptions Of The Credibility Of Management

A majority of studies use archival files to examine the effect of environmental disclosure on the stock markets and may thus lead to inconsistent findings. This paper adopts an experimental method to examine the effects of environmental disclosure on investors’ investment decisions and further examines their perceptions of the credibility of management in the setting of Taiwan. Particularly, environmental disclosure with different extent is examined. The results show that environmental disclosure has positive effects on investors’ stock purchase decisions and their perceptions of the credibility of management no matter the extent of environmental disclosure is. The findings have essential policy implications for security regulators and encourage firms in emerging countries to implement environmental management well and enhance environmental disclosure transparency