Does the resource-dependent motivation to disclose environmental information impact company financing? Evidence from renewable energy companies of China

Abstract

Corporate environmental information disclosure systems are important for controlling pollution caused by corporate activities. However, different motives associated with environmental information disclosure have different influences on the financing of companies. This paper adopts renewable energy companies instead of high pollution industries as a research object. The study analyzes the resource-dependent disclosure motivation of renewable energy companies, and the impact of environmental information disclosure on the scale and cost of direct and indirect financing. The results show the following. First, renewable energy companies in China have a resource-dependent motivation to disclose environmental information, with a gap between the level of environmental information disclosure and their actual environmental performance. Second, renewable energy companies may obtain more direct financing amount and lower indirect financing costs, but cannot obtain lower direct financing costs and more indirect financing amount by improving the level of environmental information disclosure with the resource-dependent motivation. Third, there are differences in the specific incentives for environmental information disclosure among the Eastern, Middle, and Western regions of China. The government needs to standardize the detailed rules and standards of the corporate environmental information disclosure system, and improve the environmental protection awareness and the implementation of green credit in the Western region.