Research On The Influence Of Environmental Disclosure On Analysts’ Earnings Forecasts In Heavy Polluting Industries

As the domestic environmental issues becoming more and more outstanding, the government began to pay more attention to corporate environmental responsibility, and the listed companies environmental information disclosure is gradually becoming a hotspot Whether the environmental information disclosure is useful to capital market, how does it work? This paper will examine this problem from the perspective of analyst earnings forecasts.Based on the Equity theory, Rent-seeking theory, Legitimate theory, Stakeholder theory, Efficient-market theory, we build a dynamic model between environmental information disclosure and analyst earnings forecasts. Considering the special background of economic development of China, we put forward different hypothesis in multiple perspectives. In order to obtain reliable evidence, we use simultaneous equations model to control mutual relations between the independent and dependent variables.Specifically, we divide the sample companies into two parts, the first part which including 732 companies is prepared for testing the accuracy of analyst earnings forecasts. The second part which including 655 companies is prepared for testing the consistency of analyst earnings forecasts. We build two simultaneous equations model which taking EDI as independent variables and accuracy of analyst earnings forecasts, consistency of analyst earnings forecasts as dependent variables respectively. We use Hausman test to examine simultaneity between the equations. After confirming the simultaneity,2SLS is employed to empirically research the model. The results show that:the higher the quality of environmental information disclosure, the lower analyst forecasts errors and dispersion. In order to explore whether the character of Property right, Governance environment, Financial restatement has an impact on the relation between environmental information disclosure and analyst earnings forecast, we add cross terms into the simultaneous equations model. The results are summarized as below: compared with private enterprise,the role the quality of environmental information disclosure played in promoting forecasts accuracy and consistency is weakened in state-owned enterprises; Compared with enterprises located in the provinces where governance environment is good, the role the quality of environmental information disclosure played in promoting forecasts accuracy and consistency is weakened in the enterprises located in the provinces where governance environment is poor, Compared with enterprises which didn’t have financial restatements in the past three years, the role the quality of environmental information disclosure played in promoting forecasts accuracy and consistency is weakened in the enterprises which had financial restatements in the past three years.Finally, combined with the results of the empirically research and given the shortcomings of environmental information disclosure, capital market operation in China, the paper makes some suggestions in improving environmental information disclosure, promoting the social responsibility, environmental responsibility investment among investors, improving the efficiency of Environmental protection funds in state-owned enterprises, clearing the policy implementation barriers etc.