Does China's river chief policy improve corporate water disclosure? A quasi-natural experimental

Abstract

Water resources management has been valued by governments around the world for many years, and different countries have implemented different efforts. To explore the actual impact of water resources management, this study took China's River Chief Policy (CRCP) as an example, adopted the differences in differences method (DID), and used a sample of China's highly water-sensitive listed companies from 2010 to 2017, to study the impact of water management policies on corporate water disclosure. This study found that for companies located by a river, especially state-owned companies and companies with low equity concentration, the CRCP significantly improved the quality of water disclosure. Further research has shown that in regions with low market orientation, the CRCP has had a “spot” or “characteristic” impact on corporate water disclosure; moreover, it is “progressive”. A series of methods (such as a hysteresis test, propensity score matching, and a placebo test) were used to test the robustness of our study, and these tests verified the reliability of our research conclusions.