Does Where We Live Influence How Green We Act? Urban Expansion and Climate Disclosure

As climate‐related risks intensify, corporate environmental information disclosure (EID) plays a critical role in environmental governance. This study examines how urban sprawl influences EID quality and the mechanisms behind this relationship. Based on panel data of 4387 listed firms in China from 2010 to 2023, using a text‐mined EID score alongside a remote‐sensing sprawl index, we show that spatially fragmented governance motivates firms to substitute reputational assurance for regulatory compliance. This effect is moderated by city‐level regulatory pressure, carbon reduction performance, firm‐level environmental performance, and executive environmental awareness. Further examination indicates that state‐owned, tech‐intensive firms, as well as those based in central and western areas, experience a more substantial effect. Grounded in institutional theory, legitimacy theory, and the reputation management perspective, this study develops a conceptual framework linking urban spatial structure to corporate environmental behavior. The findings extend the external governance perspective in EID research and provide practical implications for strengthening regulatory responses in spatially dispersed urban areas and promoting corporate green transition.