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Will Corporate Political Connection Influence the Environmental Information Disclosure Level? Based on the Panel Data of A-Shares from Listed Companies in Shanghai Stock Market

Author

Listed:
  • Zhihua Cheng

    (Northwest University)

  • Feng Wang

    (Northwest University)

  • Christine Keung

    (Wellesley College)

  • Yongxiu Bai

    (Northwest University)

Abstract

The purpose of the Chinese Environmental Information Disclosure System is to protect the environment through public participation and public opinion. This paper uses data from listed Chinese companies in heavily polluted industries from 2008 to 2013 to examine the influence that corporate political connection has on corporate environmental information disclosure (CEID) level. The results show that firstly, while environmental disclosure level has improved over time, negative information that reflects the real status of environmental management has also been concealed. Secondly, although corporate political connection can influence companies to more actively disclose environmental information, it can also mask political rent-seeking in the guise of protecting the environment. This is especially prevalent in state-owned enterprises where political connection has a significant positive impact on CEID in the eastern and western parts of China. If political connections influence CEID, it will be difficult to improve the quality of environmental disclosure and provide useful information for decision makers. There is an urgent need to standardize and strictly regulate listed companies’ system for environmental information disclosure.

Suggested Citation

  • Zhihua Cheng & Feng Wang & Christine Keung & Yongxiu Bai, 2017. "Will Corporate Political Connection Influence the Environmental Information Disclosure Level? Based on the Panel Data of A-Shares from Listed Companies in Shanghai Stock Market," Journal of Business Ethics, Springer, vol. 143(1), pages 209-221, June.
    • Handle: RePEc:kap:jbuset:v:143:y:2017:i:1:d:10.1007_s10551-015-2776-0
    DOI: 10.1007/s10551-015-2776-0
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