Research On The Economic Motive Of Environmental Disclosure

With the deterioration of the environment, environmental issue is concerned by people all over the world, and consequently, the "low-carbon economy’’attract more and more attention. As a part of the whole low-carbon economy system, environmental information disclosure has gradually become an important approach for the public to know if the companies have fulfilled their environmental responsibilities. Therefore, the motivation for the environmental disclosure is becoming a hot problem for the domestic and foreign scholars.The paper is subject to discuss the motivation for the companies to disclose environmental information, and creatively, it analyzes the motivation from three aspects:the financiers, the managers and the investors. That is to say, the paper wants to find if the cost of equity, agency costs and market reaction are the matter driving the companies to disclose environmental information. It means, the article is written to find the connection between the economic efficiency of enterprises and their environmental information disclosure.Based on the signal transmission theory, the risk prediction theory and agency theory, the paper empirically analyzes the motivation for environmental information disclosure. Using the relevant data of Chinese listed companies in the industries heavy polluted, the paper design three models. The results show that:(i) There exists a negative correlation between the environmental information disclosure quality and the cost of equity, which means, the companies with higher level of the environmental information disclosure enjoy a lower level of the cost of equity,(ii) There exists a positive correlation between the agency cost and the environmental information disclosure quality, which means, the companies with higher agency costs are inclined to disclose environmental information,(iii) The stock market is more sensitive to the positive environmental affaire of the listed company. On the very day of and three days after the day of the event, the average cumulative abnormal returns are significantly different from zero. Conversely, the investors show less attention towards the negative environmental events. On two days after the event, the average cumulative abnormal returns are negative, but not significantly different from zero. As to the circumstances of each listed company, despite the average cumulative abnormal returns of one company, the others" are all not significantly different from zero. It confirms that the impact of the events on the stock price lags.