The effect of environmental information disclosure on environmental quality: Evidence from Chinese cities

Abstract

This paper attempts to provide a more systematic view of the relationship between environmental information disclosure (EID) and environmental consequences to reconcile the existing conceptual controversy and empirical inconclusiveness. Hence, using a panel data of 113 major Chinese key environmental protection cities from 2008 to 2018, this study adopts the estimations of dynamic generalized method of moments (GMM), quantile regression, panel threshold model, and dynamic spatial Durbin model (SDM) to investigate the effect of EID on environmental quality. The non-spatial empirical results indicate that EID exerts a positive influence on environmental quality in a particular region, and there is a double threshold for the impact of EID. This impact becomes pronounced and then strengthened when the level of economic development reaches critical threshold values. Moreover, the first-order lag effect of environmental quality and spatial autocorrelation are needed to be incorporated. In terms of spatial econometric estimation, the results show a positive direct while negative indirect relationship between EID and environmental quality, making the total effect nearly zero. These findings are evidenced in both the short-term (contemporaneous) and long-term (cumulative) span, which reveals so-called beggar-thy-neighbor as well as a zero-sum game among local governments. Overall, this study highlights the crucial role of EID in affecting environmental quality and calls for a mutually beneficial coordination between regions.