Environmental Information Disclosure Policy Research Articles

Punishment or reward? Environmental information disclosure in Chinese listed companies based on evolutionary game systems

AbstractIn February 2022, the Chinese government implemented a mandatory environmental information disclosure policy for publicly traded corporations. To assess the factors influencing environmental information disclosure, we developed a tripartite evolutionary game system model based on strategic interactions between the government, enterprises and the public. Afterwards, we conducted a simulation to examine the systemic interaction equilibrium among the parties involved. Additionally, we assessed critical factor changes in decision‐making for three stakeholders: initial strategy selection, related policy subsidies, regulatory penalties and public incentives. Incorporating Gaussian white noise into the evolutionary game model enhances the realism of simulations, allowing for a more accurate representation of how random disturbances affect decision‐making among the government, the public and enterprises. The study reveals that the active participation of the public in information disclosure activities has a certain degree of substitution effect on the government's choice to regulate high‐quality information disclosure by enterprises actively. The penalty mechanism is more effective than the subsidy mechanism. The public's decision‐making process is susceptible to the direct economic benefits that enterprises can gain from disclosing low‐quality environmental information.

Optimal governance radius of environmental information disclosure policy: Evidence from China

s: Urban pollution governance requires the joint participation of government, society, and enterprises, with the environmental information disclosure policy serving as a novel tool to promote multi-stakeholder engagement. This study aims to delve into the impact of the environmental information disclosure policy on regional environmental quality by using data from Chinese cities. Through analysis, the study gets the following conclusions. Firstly, the environmental information disclosure policy not only effectively reduces urban environmental pollution but also exhibits an apparent spatial spillover effect. The impact of this policy on air pollution in neighboring cities shows an inverted U-shaped pattern of first rising and then falling, with the optimal radius of this external effect estimated at 250km. Secondly, the results of the mechanism test indicate that government regulatory efforts and clean industry alternatives are essential channels for curbing urban environmental pollution. Lastly, the heterogeneity test shows that the inhibitory effect of the environmental information disclosure policy on environmental pollution is more pronounced in civilized cities, cities in the “two control zones”, sulfur dioxide control zones, and cities with high Pollution Information Transparency Index scores.

Environmental Policy Overlays and Urban Pollution and Carbon Reduction—Evidence from China

The in-depth promotion of environmental pollution prevention and control is a must for China to move towards green development, and the effectiveness of urban environmental pollution control largely depends on the selection of these environmental policies and the synergistic application of these policies. This paper empirically tests three environmental policies’ mixed and synergistic effects using Chinese urban data from 2000 to 2017. This study found that (1) the three environmental policies significantly curb urban environmental pollution and show synergistic effects. (2) The three types of environmental policies can have a superimposing effect by strengthening financial inputs and increasing environmental concern, as well as a complementary effect by improving the efficiency of environmental protection enforcement and the institutional environment. The synergy between the central environmental protection inspection policy and the environmental information disclosure policy is more of a superposition effect than a complementary effect due to the similarity of the policy objectives. (3) The synergistic effect of environmental policies is affected by factors such as the age of the principal officials and financial pressure. The younger the age of the principal officials and the cities with less financial pressure are more capable of utilizing the synergistic effect of environmental policies to form a situation where the market, the government, the public, and the enterprises work together to govern the city. This paper provides new ideas for exploring the synergies and mechanisms of environmental policies and theoretical references for the design, implementation, and effects of environmental policy portfolios in the 14th Five-Year Plan period.

Does the strengthened monitoring policy for key polluting enterprises induce China's green innovation?

To put enterprises reduce pollutant emissions and help them achieve sustainable development, China develops some policies related to environmental information disclosure (EID). A typical example is the strengthened monitoring policy for key polluting enterprises (SMPKPE). Green innovation is one of the major means to reduce pollutant emissions. However, the impact of the SMPKPE on green innovation has yet to be studied. Using the sample of China's listed enterprises from 2009 to 2021 and the multiperiod difference-in-differences method, this article examines whether the SMPKPE affects enterprises’ green innovation. The results are shown as followed: (1) the SMPKPE significantly improves enterprises’ green innovation; (2) this improvement can be achieved by strengthening the supervisory roles of banks and investors; (3) the strengths of the policy for enterprises’ green innovation are depended on the degrees of the financial constraint faced by enterprises. Specifically, taking the financial constraint as a threshold variable, it is found that the SMPKPE significantly improves the green innovation of enterprises with high degrees of financial constraint, while the policy reduces the green innovation of enterprises with low degrees of financial constraint; (4) the SMPKPE improves the green innovation of state-owned enterprises but fails to influence the green innovation of nonstate-owned enterprises. On a theoretical level, the conclusions of this article help to deepen the understanding of EID policies. On a practical level, the successful experiences of China provide valuable practical implications for China and other developing countries that currently face dual economic and environmental pressure.

The impact of EID policy and trade on the environmental effects of Chinese paper enterprises from the perspective of financial constraints

Accompanying China's accession to the World Trade Organization, the rapid development of the Chinese economy has led to increasingly serious environmental issues. However, the inherent mechanisms underlying the impact of Environmental Information Disclosure (EID) policy and trade on the environmental effects of Chinese paper enterprises remain unclear in the context of the era's requirement for a resource-conserving and environmentally-friendly society. The pollution problem in the papermaking industry has received attention worldwide, and how to balance the environmental and development issues of papermaking enterprises is an urgent issue that needs to be solved in the academic community. This study explores the impact mechanisms of EID policy and trade on the environmental effects of enterprises from the perspective of financial constraints. Utilizing the PSM-DID model, the study investigates the moderating effects of financial constraints on the EID policy and import-export trade. The findings reveal that both external and internal financial constraints have negative, detrimental effects on the environmental effects of the EID policy and trade. These constraints impede research and development investment and technological upgrades, hinder productivity improvement, and hamper the realization of “regulatory and trade innovation effects”. This study enriches our understanding of the mechanisms by which trade affects the environmental effects of Chinese paper enterprises and further identifies the impacts of Chinese EID policy and trade on pollution emissions by enterprises, providing a theoretical basis and practical foundation for the government in formulating financial, environmental, and trade policies.

New ambient air quality standards, human capital flow, and economic growth: Evidence from an environmental information disclosure policy in China

The significance of environmental quality for the movement of human capital and economic development is growing. This study utilizes the difference-in-difference (DID) approach to analyze the effects of the implementation of new ambient air quality standards (NAAQS) on economic development and investigate its underlying mechanism. The research indicates that the NAAQS promotes urban economic growth, and this impact tends to progressively intensify over time. According to the analysis of the mechanism, the NAAQS had a significant impact on the city's human capital, which in turn contributed to economic growth. The analysis of heterogeneity indicates that the NAAQS promotes economic growth primarily in the eastern region, in large and medium-sized cities, and in cities where the government pays more attention to environmental protection. This study offers a new explanation for how environmental information disclosure (EID) promotes economic growth and provides policy enlightenment for local governments on how to increase talent inflow.

Corporate environmental information disclosure and tax avoidance: Evidence from China

This paper examines the impact of environmental information disclosure (EID) on corporate tax avoidance. By exploiting China's EID policy as a natural experiment, we employ a difference-in-differences (DID) estimation approach to reach the following findings: (1) EID can promote corporate tax avoidance, and this result remains robust after conducting a battery of tests; (2) the research identifies two distinct channels through which EID influences corporate tax avoidance: green innovation and capital investments; and (3) the heterogeneity analysis reveals that the impact of EID on tax avoidance is notably heightened in highly polluting industries, competitive sectors, and regions in China characterized by weak tax efforts and strong government competition. Through the application of a scientific approach, we reveal novel insights into the correlation between EID and tax avoidance, thereby providing significant implications for the development of environmental regulatory policies. In conclusion, we recommend that governments employ a targeted approach to tackle tax avoidance in specific enterprises or industries. Simultaneously, governments should consider implementing subsidies and tax incentives to mitigate the underlying incentives for enterprises to engage in tax avoidance.

FinTech and Green Credit Development—Evidence from China

The existing literature on FinTech and green finance has primarily focused on exploring sustainable economic and environmental benefits. However, empirical research examining the effect of FinTech on green finance remains underexplored. In light of the advantageous position of green credit in the development of green finance in China, this study analyzes the impact of FinTech on green credit development using polluting listed firms in 2012–2021. The results show that FinTech significantly improves the development of green credit, affecting it through two crucial mechanisms: information asymmetry and green credit allocation efficiency. Additionally, heterogeneity analysis reveals that FinTech has a more significant impact on regions with higher government environmental objectives, small-to-medium enterprises with low carbon emissions, and firms with high external ESG (Environment, Social, and Governance) scores. Overall, our findings indicate that financial institutions should be committed to leveraging FinTech for the pre-loan investigation of green credit, and policymakers should encourage the development of FinTech in order to perfect environmental information disclosure policies to establish environmental information-sharing platforms.

The impact of environmental information disclosure on green innovation in extractive enterprises: Promote or crowd out?

Environmental information disclosure (EID) is an essential manifestation of a firm's Environment, Social, and Governance (ESG) strategy. However, there is no consensus on whether EID can improve extractive enterprise green innovation. Drawing on data from Chinese-listed extractive industries companies for the period 2002–2017, this paper disentangles the complex impact of EID on green innovation by using the difference-in-difference method. The results show that the EID policy improves the overall green innovation performance of the extractive firms, but this improvement is mainly driven by the utility model patents rather than green invention patents with higher innovation levels. The dynamic effects show that the green innovation effect of EID has an upward trend after a three-year lag. Moreover, the green innovation effect in regions with high information disclosure intensity and state-owned enterprises is more prominent. Moreover, the mechanism tests reveal that although the resource crowding-out effect will hinder green innovation activities, EID can stimulate firms to conduct green innovation activities by alleviating financing constraints, increasing internal incentives, and imposing external pressure. Our findings provide the necessary empirical support for the government to promote the voluntary instruments.

The impact of new ambient air quality standards on green total factor energy efficiency: Evidence from an environmental information disclosure policy in China

The implementation of the new ambient air quality standards (NAAQS) in 2012 is a milestone in China’s environmental information disclosure process. The fully automated collection and publication of pollution information provides a convenient way to measure the environmental protection process around the country. This paper investigates the association between NAAQS and green total factor energy efficiency (GTFEE) enhancement in Chinese resource-based cities, using the generalized multiperiod DID method and 2004–2019 panel data from 282 prefecture-level cities. We find that the implementation of this NAAQS significantly promotes GTFEE’s improvement in China’s resource-based cities. Furthermore, we discover that both the type of industrial base and the initial public monitoring motivation influence the improvement effect of the NAAQS on GTFEE. In further studies, NAAQS enhances GTFEE through industrial structure optimization, and the magnitude of the local NAAQS effect is influenced by the level of green innovation. Finally, we make recommendations including implementing targeted environmental regulations and enhancing environmental information regulation.

Urban spatial structure and environmental efficiency: Empirical analysis from prefecture-level cities in China

China’s environmental problems are emerging with the continuous development of the economy and urbanization. The study of the impact of urban spatial structure on environmental efficiency has important significance concerning exploring ways to reduce the environmental cost of economic activity. Based on the fusion-corrected DMSP-OLS and NPP-VIIRS nighttime light data, this paper constructs spatial structure indicators of 276 prefecture-level cities and then empirically tests the impact of urban spatial structure on environmental efficiency using a fixed-effects model. The results show that: 1) The monocentric spatial structure has higher environmental efficiency than the polycentric spatial structure. 2) The mechanism analysis shows that the monocentric spatial structure could improve environmental efficiency through learning, sharing, and matching. 3) Population size and density have a robust moderating effect that when the resident population size of a city is more than 5 million or the population density is beyond 280 persons/km2, the monocentric spatial structure has a negative impact on environmental efficiency. In contrast, the polycentric spatial structure is more effective. 4) The point-based household registration policy adopted by the government to control population size has no significant impact on environmental efficiency, while the environmental information disclosure policy can effectively play a role. Our findings provide a basis for the Chinese government to formulate urban planning and environmental protection policies and offer the experience to other developing countries.

The Effect of Environmental Information Disclosure on Green Total Factor Productivity: Evidence from Quasi-Natural Experiments on Cities in China

The relationship between environmental regulation and green economic growth has become a focal issue in China. This study utilizes the environmental information disclosure (EID) policy as a quasi-natural experiment in the Chinese context. Using a sample of 280 Chinese cities from 2003–2019 and measuring urban green total factor productivity (GTFP), the propensity score matching and difference-in-difference methods are applied to assess the impact mechanism of EID on urban GTFP in China. The results show that, first, the urban GTFP showed a decreasing trend from 2003 to 2008 and a general increasing trend from 2009 to 2019. The EID policy had a significantly positive impact on GTFP, and this finding remained robust after a series of tests. Second, the policy effect of EID was more pronounced in large and medium-sized cities than in small cities and eastern and central regions. The mechanism analysis shows that a positive effect from EID on GTFP in cities can be achieved through green technological innovation and industrial agglomeration.

Impact of Environmental Information Disclosure Policy and Trade on Chinese Paper Industry Environmental Effects.

While participation in the international division of labor has led to rapid economic development, it has also resulted in pressing environmental issues in China. In the context of “building a resource-saving and environment-friendly society” and the current sustainability requirements, research on the environmental impact of Chinese paper companies from the perspective of Environmental Information Disclosure (EID) policy and trade has not yet reached a consensus. This study constructs an analytical framework for the EID policy impact mechanism and trade on the environmental effects of the paper industry and enterprises. It explores the direct and indirect effects of EID policy and import-and-export trade on the paper industry environmental effects using the Propensity Score Matching and Difference-in-Differences (PSM-DID) model. EID positively impacts the pollution reduction of enterprises mainly through the technical effect. Export trade positively impacts the reduction of enterprises’ emissions through the technology effect. However, the demand of the international market increases the pollution from the paper industries, which has a negative impact. Importing will enable enterprises to obtain greater price advantages which can alleviate and transfer the costs brought by EID. This study analyzes the impact of trade on the environmental effects of Chinese paper enterprises and identifies the impact of China’s EID policy and trade on enterprises’ pollution emissions. It provides a theoretical and practical foundation for the Chinese government to formulate environmental and trade policies.

How does public environmental supervision affect the industrial structure optimization?

Based on the panel data of 278 prefecture-level cities in China from 2005 to 2017, this study takes the environmental information disclosure policy implemented in 2008 as a quasi-natural experiment and uses the difference-in-difference method to examine the impact of public environmental supervision on industrial structure upgrading. This study found thatpublic environmental supervision has indeed significantly promoted the industrial structure optimization. It is noteworthy that, the impact of public environmental supervision on industrial structure optimization is heterogeneous across regions and corresponding to the intensity of environmental regulations. Public environmental supervision in the eastern region has significantly promoted the optimization of the industrial structure, while the promotion effect in the central and western regions is not obvious. Besides, the effect of public environmental supervision is more significant in the cities with relatively tight traditional environmental regulations. The mechanism analysis shows that public environmental supervision promotes industrial structure upgrading mainly by influencing the level of urban technological innovation, and the level of technological innovation plays an intermediary role between public environmental supervision and industrial structureoptimization. This study has important reference significance for further improving the environmental information disclosure system and constructing an environmental governance system with the government as the leading body, enterprises as the main body, and the public as the common participation.

Environmental Information Disclosure, Fiscal Decentralization, and Exports: Evidence From China

We take the “Environmental Information Disclosure Measures (Trial)” implemented in China as a quasi-natural experiment and use the difference-in-difference (DID) method to identify the impact of environmental information disclosure (EID) on local exports. Additionally, we further investigate the impact of fiscal decentralization on local governments’ performance of this centrally mandated environmental information disclosure policy. Our results suggest that EID significantly hinders local exports, and such an inhibition effect exhibits obvious regional and stringency heterogeneity. Furthermore, the degree of fiscal decentralization is positively related to the enthusiasm of local governments in implementing the EID policy, thus strengthening EID’s inhibitory impact on local exports. As for the mechanisms behind, we verify that EID activates the “cost effect” and increases the cost of local pollution control. However, it cannot stimulate local innovation at the same time, and the “innovation effect” does not work, which ultimately results in a decrease in local exports; for cities with a high degree of fiscal decentralization, local governments tend to actively implement the centrally-mandated environmental protection policy by increasing investments in environmental pollution control and stimulating the innovation vitality of local enterprises. But the benefits from the innovation improvement cannot fully offset the negative impact of the increase in environmental costs in the short term, and local exports are further reduced.

Truth Hurts? Mandatory Environmental Information Disclosure and Regulatory Activities

This paper examines the impacts of mandatory environmental information disclosure policy on the implementation of traditional command-and-control environmental regulations in the context of the Toxics Release Inventory (TRI), which is a major environmental information disclosure program in the United States, and the Clean Air Act (CAA). With a difference-in-differences research design that exploits TRI’s expansion of industry coverage in 1998, which has applied TRI’s disclosure requirements only to larger facilities in the newly covered industries, I find that regulators significantly increased the numbers of CAA inspection activities on facilities that started to disclose information in the TRI, while the numbers of CAA enforcement activities did not change. Complementing the large body of literature that investigates various stakeholders’ responses to information disclosure policy, the findings suggest regulatory response is also an important mechanism for the efficacy of information disclosure policy. They also highlight the strong intercorrelations between different forms of environmental policy.

Do Environmental Information Disclosure Policies Inhibit or Promote China’s Export Growth?

Using 29 Chinese provincial and municipal data from 2008 to 2017,We construct a stochastic frontier production model of trade to study the effects of environmental information disclosure (EID) policies on China’s export growth. Our analysis shows that:At aggregate level, the EID policies inhibit China’s export growth, while there are significant stage differences. From 2008 to 2013, the EID policies significantly inhibit China’s export growth. From 2013 to 2017, the effect of EID policies on export growth change from inhibiting export growth to promoting export growth. Research on the impact mechanism shows,the EID policies inhibit export growth through cost increase effect and social effect, and promote export growth through innovation compensation effect. The main reasons why the impact of EID policies on exports has changed from inhibition to promotion are that the cost increase effect and social effect are gradually weakening over time while the innovation compensation effect is gradually increasing over time.

Has environmental information disclosure eased the economic inhibition of air pollution?

To improve environmental quality, the Chinese government implemented a series of environmental policies, including the environmental information disclosure system, which is critical to promoting China’s ecological development, and PM2.5 monitoring data, which constitute the most important and valued index. Using data from 120 cities in which the environmental information disclosure policy was implemented in China from 2008 to 2016, this research empirically tested the impact of air pollution on economic development and the transmission mechanism of this effect using a two-stage least squares regression model (2SLS). Additionally, this study innovatively tested the impact of environmental information disclosure on air pollution and economic development. Our results indicate that air pollution can hinder economic development and that spending on scientific research and financing polluters are two crucial transmission mechanisms. Disclosure of environmental information effectively reduces concealment of and failure to report pollution, enabling the environmental reports published by the government to more accurately reflect the air quality. By increasing the government’s environmental protection expenditure, this disclosure system expands environmental protection employment and infrastructure construction. In this way, the negative externality of air pollution has been alleviated by the government’s enhanced environmental governance.

The effectiveness of China's environmental information disclosure at the corporate level: Empirical evidence from a quasi-natural experiment

Using The Measures of National Key Monitoring Enterprises for Self-monitoring and Information Disclosure (Trial) issued in 2014 as a quasi-natural experiment, this study has identified the effect of China's environmental information disclosure (EID) on economic performance at the corporate level by employing the DID model including the parallel trend hypothesis test, the placebo test, and the PSM-DID method. The results show that the effect of EID on national key monitoring enterprises’ economic performance is significantly negative in the short-term but significantly positive in the long-term. Moreover, the heterogeneity of ownership structure is supported in this study, that is, the promotion effect of EID on economic performance for state-owned enterprises is weaker than the non-state-owned enterprises. Furthermore, the heterogeneity of industry attribute is also established in this study, that is, the effect of EID on economic performance for chemical enterprises is the greatest, followed by other enterprises, and the effect of it on economic performance for non-ferrous metal enterprises is the smallest. Hence, it is necessary and important to promote classified supervision in the implementation of EID. Therefore, this study can shed light for the academics and policymakers seeking to improve EID policies.

Can mandatory environmental information disclosure achieve a win-win for a firm’s environmental and economic performance?

Using the Guidelines of the Shanghai Stock Exchange on Environmental Information Disclosure for Listed Companies issued in 2008 as a quasi-natural experiment, we employ DID (difference in differences) model to identify the effects of China’s mandatory environmental information disclosure (MEID) on a firm’s environmental and economic performance. The results show that MEID has a positive impact on the firm’s environmental performance, but has a negative impact on the firm’s economic performance; MEID affects the firm’s environmental and economic performance by increasing environmental management activities and costs; this policy has a more significant impact on the state-owned enterprises and small and medium enterprises than on non-state-owned enterprises and large enterprises. The results remain robust in a series of robustness tests. This study offers guidance for policymakers seeking to improve environmental information disclosure policies.