Abstract
In the last decade, the public concern over environmental problems has led to the emergence of environmental regulations in firms’ information disclosure on environmental practice, especially in some developing countries such as China. Based on a panel dataset composed of the listed manufacturing firms in China during 2006–2016, this paper uses the difference-in-differences (DID) model and the propensity score matching (PSM) method to investigate whether the Environmental Information Disclosure Measure (for Trial Implementation; EIDMT) affects the firm value. The results show that EIDMT exerts a significant impact on the listed manufacturing firms’ value. In consideration of the firm’s ownership, EIDMT plays a more important role in the firm value of non-state-owned firms than state-owned firms. Furthermore, using a PSM–DID model for eastern, central, and western China, we find that EIDMT significantly affects the firm value in eastern and western China but has little impact on central China.
Highlights
As the world’s most populous country and the fourth largest in area, China’s economy is growing at a faster rate than any major nation
The three regression results show that the coefficients of the interaction term (T × Treat) were all significantly positive at the 1% level, indicating that the firm value of the manufacturing firms publicizing the environmental information is larger than that in other manufacturing firms
Through one of the most important environmental information disclosure (EID) policies in China, this study investigated the impact of EIDMT on the firm value by applying the propensity score matching (PSM)–DID method
Summary
As the world’s most populous country and the fourth largest in area, China’s economy is growing at a faster rate than any major nation. China’s severe environmental deterioration is caused by economic growth and to an extent of imperfect environmental policies Under this circumstance, the Chinese government makes strategic adjustments to alleviate conflicts of interest between environmental protection and economic development [3,4]. A variety of environmental disclosure policies have introduced to regulate firms’ decisions and activities on the environment by affecting their corporate financial performance (CFP). The impact of environmental information disclosure (EID) on CFP is still controversial. As a proxy for information transparency, EID avoids information asymmetry between managers and stakeholders This confers competitive advantages to a firm [9,10,11,12,13]. The market effect of rewarding and punishing information disclosure cannot be well generated
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