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The Moderating Role of Environmental Information Disclosure on the Impact of Environment Protection Investment on Firm Value

Author

Listed:
  • Kedan Wang

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

  • Wenjia Cui

    (Business Research and Development Center of ICBC, Beijing 100096, China)

  • Mei Mei

    (Institute of Medical Information & Library, Chinese Academy of Medical Sciences, Beijing 100005, China)

  • Benfu Lv

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

  • Geng Peng

    (School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190, China)

Abstract

The presence of a link between corporate environmental protection investment and firm value is essential for enterprises to have incentives to invest in environmental protection by themselves. How environmental information disclosure affects the relationship between environmental protection investment and firm value is also an issue worth exploring. This paper uses the regression model with the industry and time-fixed effects to examine the relationship between environmental protection investment and firm value of China’s A-share heavily and non-heavily polluting enterprises from 2010–2020, as well as the moderating role of environmental information disclosure. The empirical results show that (1) there is a significant U-shaped relationship between environmental protection investment and firm value, and (2) corporate environmental information disclosure has a moderating effect. Specifically, it has an “amplifying” effect on the relationship between environmental protection investment and firm value. If a company’s environmental protection investment is insufficient, overly transparent corporate environmental disclosure will exacerbate the decline in firm value. Once environmental protection investment is up to standard, adequate disclosure can contribute to an increase in firm value.

Suggested Citation

  • Kedan Wang & Wenjia Cui & Mei Mei & Benfu Lv & Geng Peng, 2023. "The Moderating Role of Environmental Information Disclosure on the Impact of Environment Protection Investment on Firm Value," Sustainability, MDPI, vol. 15(12), pages 1-27, June.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:12:p:9174-:d:1165094
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    Cited by:

    1. Kedan Wang & Shanshan Yu & Mei Mei & Xiao Yang & Geng Peng & Benfu Lv, 2023. "ESG Performance and Corporate Resilience: An Empirical Analysis Based on the Capital Allocation Efficiency Perspective," Sustainability, MDPI, vol. 15(23), pages 1-31, November.
    2. Xiao Yang & Wen Jia & Kedan Wang & Geng Peng, 2024. "Does the National Carbon Emissions Trading Market Promote Corporate Environmental Protection Investment? Evidence from China," Sustainability, MDPI, vol. 16(1), pages 1-22, January.

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