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The Impact of Carbon Disclosure on Business Valuation

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Listed:
  • Shuyi He
  • Shihong Zeng

Abstract

Against the backdrop of accelerating global carbon neutrality and deepening Paris Agreement rules, this study explores the economic impacts of carbon disclosure (CD), a key link between corporate environmental governance and capital market valuation. Using panel data of Chinese A-share listed firms (2015–2022), we employ fixed-effects models, mediation tests, and regression analyses to examine CD’s effects on firm valuation. Key findings include: (1) one unit increase in CD level raises valuation by 8.6%; (2) CD’s valuation boost is stronger for non-state-owned and manufacturing firms; (3) Introducing the SA index to measure financing constraints reveals a mediating mechanism: CD alleviates information friction, reduces financing constraints, and improves investment efficiency. The study empirically supports refining CD systems and environmental governance strategies, while innovatively integrating stakeholder theory with dynamic valuation models to expand the frontiers of firm valuation research.  JEL classification numbers: G34, G38, G39.

Suggested Citation

  • Shuyi He & Shihong Zeng, 2025. "The Impact of Carbon Disclosure on Business Valuation," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 15(2), pages 1-2.
    • Handle: RePEc:spt:apfiba:v:15:y:2025:i:2:f:15_2_2
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    References listed on IDEAS

    as
    1. Jing Zhu & Chen Zhang & Jingsong Zhao & Yuanpu Ji & Wenjun Wang, 2024. "The impact of declarative and interactive carbon disclosure on firm value: complements or substitutes?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(5), pages 13375-13409, May.
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    6. Birjees Rahat & Pascal Nguyen, 2024. "The impact of ESG profile on firm's valuation in emerging markets," Post-Print hal-04729376, HAL.
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    More about this item

    Keywords

    Carbon disclosure; Corporate valuation; Financing constraints; Sustainable development.;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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