Environmental information disclosure quality, media attention and debt financing costs: Evidence from Chinese heavy polluting listed companies

Abstract

Employing the data of 842 listed companies in the heavy pollution industries between 2014 and 2016, this paper applies the fixed effect regression model to reveal the impact of corporate environmental information disclosure quality and media attention on corporate debt financing costs. Results show that: corporate environmental information disclosure quality has a significant negative effect on the debt financing costs, every one unit increase in the company's environmental information disclosure quality will reduce the debt financing costs by 0.31%; the linear adjustment effect of the number of media reports on corporate environmental information disclosure quality and the debt financing costs level of listed companies is not significant, but there is a significant U-shaped mediating effect. Further, by distinguishing between the positive tone of media reported and the negative tone of media reported, this article finds that: the coefficient of the cross item Media_Pos × EID_Quality is −0.0162, but it is not significant, which indicating positive media coverage has little impact on the negative relationship between environmental disclosure quality and debt financing costs; while the coefficient of the cross item Media_Neg × EID_Quality is −0.0163, and it is significant at 10% level, which disclosing media's negative reports mitigate the impact of environmental information disclosure quality on reducing corporate debt financing costs. Finally, this paper presents some policy recommendations: government departments develop and implement corporate environmental information disclosure standards for heavily polluting industries; company should avoid the impression management of voluntary disclosure of environmental information; eliminate collusion between the media and the company in the heavy pollution industries.