Abstract
Environmental information disclosure has become a widely-used tool to encourage the participation of multiple market players in environmental governance. However, it remains unclear whether it can promote the efficiency of capital allocation in enterprises. This study uses econometric modeling and data from heavily polluting enterprises in Chinese A-shares between 2013 and 2020 to explore the impact of environmental information disclosure on capital allocation efficiency, as well as its mechanisms. It is found that environmental information disclosure significantly and robustly enhances the efficiency of capital allocation, and the effect varies by firm’s size, ownership, life cycle, and region. Nevertheless, employees and creditors are found to have a negative moderating role in this effect. These findings have important implications for the simultaneous improvement of environmental performance and capital allocation efficiency in the context of China’s ecological civilization system and high-quality economic development and for promoting a “win-win” situation for environmental protection and economic growth.
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