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Environmental policy orientation and corporate green transformation: A study based on information disclosure perspective

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  • Zhang, Zhihe
  • Yu, Zaishui
  • Yao, Chengyu
  • Zhang, Zerui

Abstract

This research leverages China's 2018 Environmental Protection Tax Law enactment as a policy shock, applying a DID methodology to Chinese A-share listed firms' data to assess how environmental policy signals and disclosure practices drive sustainable corporate transitions. The results demonstrate that policy signals and disclosure requirements collectively accelerate firms' adoption of sustainable practices through enhanced regulatory pressures and transparency mechanisms. Notably, this promotional effect exhibits heterogeneity contingent upon variations in firms' environmental governance capabilities and ownership characteristics. Mechanism tests further demonstrate that climate risk and political embeddedness serve as crucial transmission channels.

Suggested Citation

  • Zhang, Zhihe & Yu, Zaishui & Yao, Chengyu & Zhang, Zerui, 2025. "Environmental policy orientation and corporate green transformation: A study based on information disclosure perspective," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s154461232500981x
    DOI: 10.1016/j.frl.2025.107723
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    References listed on IDEAS

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    Cited by:

    1. Kong, Linghui & Chen, Rongquan & Huang, Xinyu & Wang, Fan, 2025. "Can Industry-Specific Information Disclosure Guidelines Alleviate Corporate ESG Divergence? Evidence from Chinese List Companies," International Review of Financial Analysis, Elsevier, vol. 106(C).
    2. Gao, Jiaming & Zhang, Li, 2025. "A differentiated study of the impact of command and market-based environmental regulation on corporate R&D investments —take China's coal power industry chain as an example," Energy Policy, Elsevier, vol. 207(C).

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    Keywords

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    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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