Monitoring effect of transparency: How does government environmental disclosure facilitate corporate environmentalism?

Abstract

Environmental information transparency is a key policy instrument in environmental governance, which has been emphasized in most of the literature. Although a large body of research has focused on its role at the national or industrial level in the developed countries, few studies have extended it to emerging economies and tested its role in the subnational context. In this paper, we have empirically examined how government environmental disclosure shapes corporate environmentalism in the context of China. It is argued that the information transparency of government environmental disclosure can promote corporate environmentalism by providing supports for governments' decision‐making of environmental governance, the activeness of environmental nongovernment organizations, and the participation of general public in environmental issues. Especially, we have highlighted two kinds of influences on focal relationship: booster role of bureaucratic capability in the diffusion of environmental institutional pressure and receiver role of organization slack and industrial competition in the perception of environmental institutional pressure. Using a panel dataset of Chinese publicly listed firms from 2008 to 2015, a positive relationship between government's environmental information transparency and corporate environmentalism is found. In addition, our result has shown that this relationship will be stronger for regions where government bureaucracy capabilities are stronger. This study contributes to understanding of the process of firms' strategic choice facing environmental and institutional changes in emerging economies.

Trend and relationship between environmental accounting disclosure and environmental performance for mining companies listed in China

“…Environmental accounting, which is sometimes referred to as ‘green accounting’ (Cho and Patten 2013 ; Marissa Matsler 2019 ) or ‘environmental management accounting (Qian et al 2018 ; Asiri et al 2020 ) is an integral part of the accounting frontier since it combines the traditional accounting reporting with ecological reporting (Lu and Li 2020 ; Tzouvanas et al 2020 ). The high rate of pollution has resulted in more studies in this field (G. Li et al 2018 ; Kostka and Zhang 2018 ; Sun et al 2019 ). Green accounting mainly uses currency or other non-monetary units to record information related to natural resources and the environment (Cho and Patten 2013 ).…”

“…Prior studies on environmental compliance have a mixed conclusion. In the study of Sun et al ( 2019 ), the study realized that less than half of the sample companies complied with environmental reporting. On the contrary, Odoemelam and Okafor ( 2018 ) concluded that more than seventy percent (70%) of the sample companies complied with the environmental disclosures.…”

Does it pay to be green? A disaggregated analysis of U.S. firms with green patents

“…Although the topic of environmental transparency and its possible influence on financial performance has been widely discussed (see Table ), its application to green innovators has been rather unexplored. Environmental information transparency is one of the key elements in the wider area of environmental governance, both at the national and firm level (Sun, Zeng, Chen, Meng, & Jin, ). It also constitutes an intrinsic aspect of business strategy, embracing all organizational processes and components at the same time (Baraibar‐Diez, Odriozola, & Fernández Sánchez, ).…”

Doing more and doing better are two different entities: Different patterns of family control and environmental performance

“…Institutional voids in emerging economies, including weak enforcement of corporate laws and regulations, lack of independent market intermediaries, and absence of effective internal corporate governance arrangement, exacerbate type I agency problem (Young, Peng, Ahlstrom, Bruton, & Jiang, 2008; Yu, Zeng, Meng, Ma, & Sun, 2020). Comparing with managers having more inside information regarding business, shareholders suffer more from difficulties in achieving business information in emerging markets (Cui et al, 2018; Sun, Zeng, Chen, Meng, & Jin, 2019). This may be because there are barely effective institutions (playing monitoring roles), such as investment banks, head hunting firms, and business press, that can offer valuable and diverse information regarding managers to shareholders (Chen, Zeng, Yu, & Xue, 2020; Luo & Chung, 2013).…”