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Does environmental information disclosure mitigate corporate risk? Evidence from China

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  • Chang, Yingying
  • Du, Xingqiang
  • Zeng, Quan

Abstract

This study is an examination of effects of environmental information disclosure on corporate risk. A study of Chinese listed firms operating from 2009 to 2015 shows that environmental information disclosure reduces firm-investor information asymmetry, decreases uncertainties about assets pricing, and thus significantly decreases corporate risk. Moreover, the relationship is more pronounced for firms in high-growth rather than low-growth industries, suggesting that environmental disclosure mitigates corporate risk for strongly growing industries. The results are robust to various checks including controlling for endogeneity. Implications for investors, companies, and regulators are discussed.

Suggested Citation

  • Chang, Yingying & Du, Xingqiang & Zeng, Quan, 2021. "Does environmental information disclosure mitigate corporate risk? Evidence from China," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(1).
    • Handle: RePEc:eee:jocaae:v:17:y:2021:i:1:s1815566920300539
    DOI: 10.1016/j.jcae.2020.100239
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    Cited by:

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    2. Yuguang Ji & Maoli Ji & Gang Yang & Shulan Dong, 2023. "Water resource management and financial performance in high water‐sensitive corporates," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2419-2434, September.
    3. Xie, Dongchun & Li, Xiaofeng & Zhou, Di, 2022. "Does environmental information disclosure increase firm exports?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 620-638.
    4. Winston Jerónimo Silvestre & Ana Fonseca & Sandra Naomi Morioka, 2022. "Strategic sustainability integration: Merging management tools to support business model decisions," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2052-2067, July.
    5. Erli Dan & Jianfei Shen & Yiwei Guo, 2023. "Corporate Sustainable Growth, Carbon Performance, and Voluntary Carbon Information Disclosure: New Panel Data Evidence for Chinese Listed Companies," Sustainability, MDPI, vol. 15(5), pages 1-27, March.
    6. Shi, Daqian & Bu, Caiqi & Xue, Huiyuan, 2021. "Deterrence effects of disclosure: The impact of environmental information disclosure on emission reduction of firms," Energy Economics, Elsevier, vol. 104(C).
    7. Tang, Pengcheng & Jiang, Qisheng & Mi, Lili, 2021. "One-vote veto: The threshold effect of environmental pollution in China's economic promotion tournament," Ecological Economics, Elsevier, vol. 185(C).
    8. Dameng Hu & Yuanzhe Huang & Changbiao Zhong, 2021. "Does Environmental Information Disclosure Affect the Sustainable Development of Enterprises: The Role of Green Innovation," Sustainability, MDPI, vol. 13(19), pages 1-22, October.
    9. Javier Amores‐Salvadó & Gregorio Martin‐de Castro & Elisabeth Albertini, 2023. "Walking the talk, but above all, talking the walk: Looking green for market stakeholder engagement," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 431-442, January.
    10. Jing‐Yue Liu & Yue‐Jun Zhang & Charles H. Cho, 2023. "Corporate environmental information disclosure and green innovation: The moderating effect of CEO visibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 3020-3042, November.
    11. Bu, Caiqi & Zhang, Kaixia & Shi, Daqian & Wang, Shuyu, 2022. "Does environmental information disclosure improve energy efficiency?," Energy Policy, Elsevier, vol. 164(C).
    12. Javier Amores‐salvadó & Gregorio Martin‐de Castro & Elisabeth Albertini, 2022. "Walking the talk, but above all, talking the walk: Looking green for market stakeholder engagement," Post-Print halshs-03760088, HAL.
    13. Jaehong Lee & Suyon Kim & Eunsoo Kim, 2022. "Environmental Responsibility, Social Responsibility, and Governance from the Perspective of Auditors," IJERPH, MDPI, vol. 19(19), pages 1-14, September.

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