Time dynamics in the effect of carbon information disclosure on corporate value

Abstract

It is crucial to examine whether carbon information disclosure (CID) can truly enhance corporate value (CV), which motivates companies to reduce carbon emissions endogenously. Given that the dynamic impact of CID on CV evolves over time, this paper continuously investigates this time-varying relationship within the functional framework. Based on the continuous curves smoothed from 65 companies in the Shanghai Stock Exchange Social Responsibility Index, we construct an evaluation index using functional entropy weight to continuously measure the level of CID. Furthermore, to quantify the time-varying effect of CID on CV, we use functional regression to visualize its dynamics in symbol, strength, and statistical significance from 2009 to 2021. Finally, the real-time moderating effects of nature of ownership and industry attributes are also examined, revealing how the impact of CID on CV varies across different companies and periods. The results suggest the following: (1) CID adversely affected CV initially but favored later. (2) The initial negative impact and the subsequent positive impact of CID on CV are stronger in non-state-owned companies than in state-owned companies. (3) These impacts are also stronger in low-polluting companies than in high-polluting companies. In summary, this paper expands the research toolset for exploring the dynamic effect of CID on CV and offers practical implications for companies to make informed disclosure decisions.