Does energy information disclosure really improve investment efficiency? A cross-exploration based on company life cycle and unexpected expenditure

Abstract

Energy is important for environmental improvement and company development, and is displayed by information disclosure which plays a critical role in investment efficiency. This study re-explored the effect of energy information disclosure on investment efficiency in heavy pollution industry from the cross-perspective of company life cycle and expected expenditure. Specifically, this study divided companies into three groups: growth, maturity, decline stages, and in these groups, companies were sub-divided into two sub-groups: over-investment and under-investment. Collecting data from the listed companies in China, the results show that energy information disclosure significantly improves investment efficiency in growth and maturity stages when companies over-invest. However, this relationship is not obvious for over-invested companies in decline stage. Furthermore, when the investment is insufficient, the disclosure of energy information also has a positive effect on investment efficiency in growth and decline stages. While this relationship is inverted U-shaped in mature companies. This work provides suggestions for managing companies in heavy pollution to improve investment efficiency, and improve environmental improvement.