Environmental information disclosure, earnings quality and the Readability and Emotional Tendencies of Management Discussion and Analysis

Abstract

This study aims to investigate how corporate environmental disclosure affects the readability and tone-emotional tendency of management discussion and analysis reports of Chinese listed companies from 2018 to 2020. Moreover, this study introduces earnings quality indicators to further explore the mediating and masking effects of earnings quality on the relationship between environmental disclosure and report quality. The main findings of this study are as follows. First, the more comprehensive the environmental disclosure, the higher the readability and the more positive the tone of the management discussion and analysis reports. Second, the more comprehensive the environmental disclosure, the higher the earnings quality of the companies, which indirectly enhances the readability of the management discussion and analysis reports, and indirectly enhances the credibility of the positive tone.