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Impact of executive pay gap on environmental, social, and governance disclosure in China: Is there a strategic choice?

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  • Dingzu Zhang
  • Lijuan Pan
  • Luqi Liu
  • Huixiang Zeng

Abstract

This study investigates the mechanisms through which the executive pay gap affects the disclosure of environmental, social, and governance (ESG) information. Utilizing panel data from China's A‐share listed firms between 2012 and 2020, our findings reveal a significant positive correlation between the executive pay gap and ESG disclosure, with real earnings management playing a partial mediating role. Notably, the impact of the executive pay gap on ESG disclosure is more pronounced in voluntary disclosure firms and those with low internal control levels, as compared to mandatory disclosure firms and those with high internal control levels. This study provides international evidence for the strategic disclosure behavior of ESG information and the necessity of ESG disclosure regulation.

Suggested Citation

  • Dingzu Zhang & Lijuan Pan & Luqi Liu & Huixiang Zeng, 2023. "Impact of executive pay gap on environmental, social, and governance disclosure in China: Is there a strategic choice?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2574-2589, September.
    • Handle: RePEc:wly:corsem:v:30:y:2023:i:5:p:2574-2589
    DOI: 10.1002/csr.2503
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