Can environmental information disclosure spur corporate green innovation?

Abstract

How can the disclosure of environmental information (EID) stimulate corporate green innovation (CGI)? This research challenges the prevailing assumption that environmental regulations impact CGI by influencing corporate compliance costs. Instead, it offers a fresh theoretical framework to explain how EID affects CGI. This study combines signal theory and resource dependence theory to develop a moderated mediation model, illustrating how EID reduces information asymmetry and alleviates corporate financial constraints (CFC). To test these hypotheses, this study utilized data from A-share listed companies spanning the period 2004 to 2017. This study considered the year 2009 as a crucial point of analysis, marking the period before and after the implementation of China's first EID policy in 2008. This study employed a Difference-in-Differences (DID) model. The results reveal that EID has a positive impact on CGI by mitigating CFC, with non-state-owned enterprises (non-SOEs) exhibiting a more pronounced mediating effect. These findings remain robust even when the parallel trend assumption was tested to eliminate interference from other factors. This study unveils the mechanism through which voluntary environmental regulation, represented by EID, influences CGI by mitigating information asymmetry and alleviating CFC. These results deviate from the predictions of compliance cost theory and Porter's hypothesis regarding the impact of traditional environmental regulations on CGI, providing a fresh perspective on the role of voluntary environmental regulation in driving CGI.