The impact of environmental court construction on the quality of corporate environmental information disclosure

Abstract

This study evaluates the relationship between establishing environmental courts and corporate environmental information disclosure quality. We use panel data from 28,718 Chinese listed companies between 2008 and 2022 and investigate whether the quality of environmental information disclosure by companies improves owing to the establishment of regional environmental courts. The results indicate that the quality of environmental information disclosure increase significantly after establishing environmental courts in the region. Factors such as corporate green culture, public environmental awareness, and local environmental regulatory strength play intermediary roles in this relationship. In the heterogeneous analysis, we find that the effect of environmental court construction on improving the quality of environmental information disclosure is more significant for highly polluting industries and state-owned enterprises. Additionally, environmental courts are more effective in enhancing the quality of corporate environmental information disclosure in regions with the low level of legalization and the high level of environmental information disclosure. Our research contributes to environmental court construction and corporate environmental information disclosure literature and provides decision-making references for businesses and governments.