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Does Environmental Information Disclosure Make Firms’ Investments More Efficient? Evidence from Measure 2007 of Chinese A-Listed Companies

Author

Listed:
  • Xiaopeng Wang

    (School of Economics and Management, Zhejiang Sci-Tech University, Hangzhou 310018, China
    Ecological Civilization Research Center of Zhejiang Province, Hangzhou 310018, China)

  • Xueyao Shen

    (School of Economics and Management, Zhejiang Sci-Tech University, Hangzhou 310018, China)

  • Yongliang Yang

    (School of Economics and Management, Zhejiang Sci-Tech University, Hangzhou 310018, China
    Ecological Civilization Research Center of Zhejiang Province, Hangzhou 310018, China)

Abstract

Using a sample of 2822 Chinese A-listed firms over the 2002–2015 period and the propensity score matching with difference-in-differences (PSM-DID) approach, we estimate the causality of environmental information disclosure (EID)’s impact on investment efficiency based on a quasi-experiment in 2007. This paper finds strong and robust evidence that there is a significant positive connection between EID and company investment efficiency in China. We further determine that heterogeneity of EID’s performance appears in the different settings of industry and subdivision industries. The significance of several sub-industries disappeared while the others retained larger significant coefficients than the whole industry case. The probability that an enterprise issues an environmental annual report has a significant positive link with investment efficiency in heavy industry, while this relationship is weakened or even not obvious in non-heavy polluting industries. Finally, we find that employee compensation serves as a mediator from which EID has an indirect effect on investment efficiency. Our results confirm that EID plays a vital role in firm-level capital allocation efficiency.

Suggested Citation

  • Xiaopeng Wang & Xueyao Shen & Yongliang Yang, 2020. "Does Environmental Information Disclosure Make Firms’ Investments More Efficient? Evidence from Measure 2007 of Chinese A-Listed Companies," Sustainability, MDPI, vol. 12(5), pages 1-16, March.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:5:p:1895-:d:327360
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    References listed on IDEAS

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    Cited by:

    1. Yongliang Yang & Yiyang Guo & Suqing Luo, 2020. "Consumers’ Intention and Cognition for Low-Carbon Behavior: A Case Study of Hangzhou in China," Energies, MDPI, vol. 13(21), pages 1-19, November.
    2. Yang, Yongliang & Zhang, Jitao & Song, Changting & Wu, Yingying & Zhang, Bingbing, 2025. "Does environmental information disclosure make financial markets more informative? Evidence from China," Journal of Contemporary Accounting and Economics, Elsevier, vol. 21(2).
    3. Taqdees Fatima & Bing Xiang Li & Dan Zhang, 2025. "Fostering innovation sustainability with the impact of incremental environmental information disclosure under green credit constraints," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(8), pages 18997-19024, August.
    4. Zhou, Guangyou & Zhu, Jieyu & Luo, Sumei, 2022. "The impact of fintech innovation on green growth in China: Mediating effect of green finance," Ecological Economics, Elsevier, vol. 193(C).

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