Abstract
Using listed enterprises in China’s heavy pollution industry from 2009 to 2013, this study tests the relationship between marketization degree, carbon information disclosure, and the cost of equity financing. The results show that, regardless of marketization degree, the overall level of carbon information disclosure of listed enterprises in China’s heavy pollution industry is low. The content of carbon information disclosure is mainly non-financial carbon information, and the financial carbon information disclosure is very low. The cost of equity financing is different in areas with different marketization degrees, specifically speaking, the cost of equity financing is lower in regions with a high marketization degree than that of a low marketization degree. Carbon information disclosure, non-financial carbon information disclosure, and financial carbon information disclosure are negatively correlated with the cost of equity financing. The marketization degree has strengthened the negative correlation between carbon information disclosure, non-financial carbon information disclosure, financial carbon information disclosure, and the cost of equity financing, respectively.
Highlights
In order to ensure the implementation of the carbon emissions trading system countrywide in2017, the National Development and Reform Commission issued the “Notice on the Key Work of Starting the National Carbon Emission Trading Market” [1]
The VIF values of each model are significantly less than 2, showing that these models are not exist multicollinear. These models can be used for multiple regression analysis to examine the relationship between the carbon information disclosure and the cost of equity financing under different marketization degree conditions
On the basis of previous studies, this paper takes the listed companies in China’s heavy pollution industries from 2009 to 2013 as samples to test the relationship between marketization degree, carbon information disclosure and cost of equity financing
Summary
In order to ensure the implementation of the carbon emissions trading system countrywide in2017, the National Development and Reform Commission issued the “Notice on the Key Work of Starting the National Carbon Emission Trading Market” [1]. Carbon emission reduction will generate a direct cost to enterprises, which will increase the financial pressure on enterprises, so enterprises need to find a way to reduce cost. In the capital market, the improvement of the quality of enterprise carbon information disclosure will promote the reduction of enterprise capital cost [4,5]. Due to the different preferences of investors, as an ecological benefit management strategy of enterprises, non-financial information disclosure will affect their capital costs [6]. China’s capital market is representative of the emerging capital market, where the relationship between enterprise information disclosure and capital cost is similar to that of a mature capital market; that is, enterprises can reduce the cost of capital by disclosing relevant information [7]. The higher the marketization degree, the greater the possibility of enterprises disclosing high-quality internal control information [8].
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