Promote or Crowd Out? The Impact of Environmental Information Disclosure Methods on Enterprise Value

Abstract

Environmental information disclosure is a concrete practice for enterprises to actively implement the concept of green and sustainable development, which has great significance for enterprises to gain long-term competitive advantages. The academic world has widely discussed the relationship between environmental information disclosure and the economic performance of enterprises, but how the heterogeneity of environmental information disclosure methods affects the enterprise value has not been explored. This paper aims to answer two questions: (1) what is the impact of Ecomark and ESG on enterprise value? and (2) how does the interaction between Ecomark and ESG influence enterprise value? Utilizing the listed Japanese electrical equipment manufacturing enterprises dataset from 2008 to 2021, we employed the fixed panel linear regression model to confirm the relationship between Ecomark and ESG in enterprise value, and further used a moderating effect model to verify the existence of the crowd-out effect of ESG performance on Ecomark through enterprise value. In addition, a robustness check scheme was designed and performed to test the model settings, outliers and endogeneity issues. The main findings show that the obtaining of Ecomark certification and good ESG performance can help to improve enterprise value, but they may be altered regarding the heterogeneity of environmental information disclosure methods, further causing differences in enterprises’ time and economic cost burdens. Such differences increase the attractiveness of ESGs to investors, thereby crowding out the impact of Ecomark on enterprise value. Our conclusion reveals the mechanism of the heterogeneity of environmental information disclosure methods towards enterprise value, which offers a valuable reference for investors to evaluate enterprise value and paves the way for enterprise decision-makers and authorities to optimize their environmental information disclosure.

Can Environmental Information Disclosure Enhance Firm Value?—An Analysis Based on Textual Characteristics of Annual Reports

“…Thus, investigating how the textual features of a company's annual report affect the relationship between environmental information disclosure and enterprise value represents a worthwhile research topic [22,23]. As such, this study takes the quality of enterprise environmental information disclosure as its starting point to explore whether high-quality environmental information disclosure to the public can enhance enterprise value [24,25]. Furthermore, we introduce the moderating variable of corporate annual report features to investigate its impact on the relationship between environmental information disclosure and enterprise value and the differences in this impact under different property rights conditions.…”

The Impact of Environmental Information Disclosure on the Efficiency of Enterprise Capital Allocation

“…In recent years, the relationship between ED and firms' economic performance has attracted more and more scholars' attention. CAE also reflects the economic performance of firms, but few scholars have paid attention to the potential impact of ED on the CAE of firms, many studies instead research the impact of ED on enterprises' Tobin's Q, ROA, and stock prices [11][12][13][14][15]. In this paper, we further focus on the impact of ED on corporate CAE based on the existing studies and find ED has a significant promotion effect on corporate CAE, and this result is consistent with the previous studies, such as the result of Chouaibi et al [47], Emuebie et al [48], and Alipour et al [49], that is, ED is significantly positively correlated with corporate economic performance.…”

“…In recent years, there has been increasing scholarly attention to the influence of environmental information disclosure on firms' economic performance. The prevailing research findings suggest that environmental information disclosure has a positive effect on various indicators of firms' financial performance, such as Tobin's Q, return on assets (ROA), and stock prices [11][12][13][14][15]. This positive relationship can be attributed to several factors.…”

Environmental Information Disclosure, Reputation Capital and Performance of Enterprises under the Development Mode of Ecological Economy

“…The public consider the disclosure of environmental information will damage the ecological environment, thus causing adverse effects on the corporate reputation and hindering the promotion of corporate value (J.L. Gao et al, 2019) [14] .…”