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Green governance and value relevance of earnings

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  • Zhu, Bo
  • Wu, Shaoqian

Abstract

Using a large sample of Chinese listed companies from 2011 to 2021, this study examines whether and how green governance affects the value relevance of accounting earnings based on information usefulness for decision-making. The level of corporate green governance has a significantly positive impact on the value relevance of earnings. In the heterogeneity analysis, the positive effect is more pronounced for firms with low internal control quality and high financialization. Furthermore, mediating effects analyses indicate that corporate reputation and analyst following are two underlying channels through which green governance affects firms' value relevance of earnings. These findings are robust to addressing endogeneity concerns, alternative model specifications, lagging explanatory variables, and other proxies for key variables.

Suggested Citation

  • Zhu, Bo & Wu, Shaoqian, 2025. "Green governance and value relevance of earnings," International Review of Financial Analysis, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:finana:v:102:y:2025:i:c:s1057521925002078
    DOI: 10.1016/j.irfa.2025.104120
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