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The impact of air pollution on management earnings forecasts: Evidence from China

Author

Listed:
  • Zengfu Li
  • Xin Kuang

    (School of Economics and Management, South China Normal University, Guangzhou, People’s Republic of China)

  • Yue Gan

    (School of Economics, Jiangxi University of Finance and Economics, Nanchang, People’s Republic of China)

  • Zheng Pan

    (College of Management, Zhongkai University of Agriculture and Engineering, Guangzhou, People’s Republic of China)

  • Yangjun Cai

    (Beijing Normal-Hong Kong Baptist University, Guangdong, People’s Republic of China)

Abstract

Existing studies highlight the importance of air pollution in stock market participants’ information production. We extend this literature by investigating the impact of air pollution on management earnings forecasts among Chinese listed firms. Our findings show that air pollution significantly decreases management earnings forecasts voluntarily released by firms. Empirical results are robust to alternative measures, additional controls, the pseudo forecast date test, the difference-in-differences method and the instrumental variable approach. We further identify managerial ability and management mood as underlying mechanisms. The effects of air pollution are more pronounced among firms with fewer female executives, older executives, and less-educated executives. JEL Classification: M41, G30, Q53

Suggested Citation

  • Zengfu Li & Xin Kuang & Yue Gan & Zheng Pan & Yangjun Cai, 2026. "The impact of air pollution on management earnings forecasts: Evidence from China," Australian Journal of Management, Australian School of Business, vol. 51(2), pages 561-582, May.
    • Handle: RePEc:sae:ausman:v:51:y:2026:i:2:p:561-582
    DOI: 10.1177/03128962251331084
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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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