Journal
SUSTAINABILITY
Volume 12, Issue 5, Pages -Publisher
MDPI
DOI: 10.3390/su12051895
Keywords
environmental information disclosure; investment efficiency; corporate social responsibility; corporate financial performance
Funding
- Science Foundation of Zhejiang Sci-Tech University [18092252-Y]
- Humanities and Social Sciences Key Research Base of Zhejiang Province (Applied Economics) [2015GJHZ04]
- project of philosophy and social science of Zhejiang Province [19NDJC235YB]
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Using a sample of 2822 Chinese A-listed firms over the 2002-2015 period and the propensity score matching with difference-in-differences (PSM-DID) approach, we estimate the causality of environmental information disclosure (EID)'s impact on investment efficiency based on a quasi-experiment in 2007. This paper finds strong and robust evidence that there is a significant positive connection between EID and company investment efficiency in China. We further determine that heterogeneity of EID's performance appears in the different settings of industry and subdivision industries. The significance of several sub-industries disappeared while the others retained larger significant coefficients than the whole industry case. The probability that an enterprise issues an environmental annual report has a significant positive link with investment efficiency in heavy industry, while this relationship is weakened or even not obvious in non-heavy polluting industries. Finally, we find that employee compensation serves as a mediator from which EID has an indirect effect on investment efficiency. Our results confirm that EID plays a vital role in firm-level capital allocation efficiency.
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