Research On The Relation Between Environmental Accounting Information Disclosure Quality And Financing Costs

In recent years, "Haze" is the environmental issues just like the tip of the iceberg, but it is much enough to affect our lives and catch our attention. As environmental pollution problems have become increasingly prominent, mankind has had to reexamine environmental issues, deeply reflect on their behavior and try to find the balance between economic development and environmental protection. As the micro-economic entities, enterprises have unavoidable responsibilities in environmental issues to play an important role in achieving the harmonious relation among the environment, economy and society. Environmental accounting information can disclose the important information which will fully demonstrate that they have completed their environmental achievements and implemented the environmental management behavior effectively, which could directly affect stakeholders’decisions. As a result, that information controls the direction of resources flow and the cost of the necessary funds. Therefore, the relationship between environmental accounting information disclosure quality and financing costs has great research significance.This thesis attempts to discuss the economic consequences of corporate environmental accounting information disclosure via the perspective of the financing cost, and terrify environment accounting information disclosure quality can affect investors, creditors and other stakeholders to evaluate enterprise’s value and make reasonable decisions, finally it can reduce the enterprise’s financing costs. This research will provide empirical evidence to government regulatory and policy making bodies to make the relevant policies and provide theoretical guidance for the whole industry practices. Especially to the heavy polluting enterprises, improving the system of the environmental accounting information disclosure builds the cornerstone of the listed companies, and also becomes investors and creditors’ important reference. I select a portion of the heavy polluting enterprises from Shanghai and Shenzhen stock exchange as research subjects, the relationship between environmental accounting information quality and cost of financing will be verified through empirical methods.Firstly, I do the research in terms of the background analysis, literature review and theoretical analysis and explore the internal relations between the environmental accounting information disclosure quality and the financing costs which conclude the equity financing costs, the debt financing costs and the total financing costs and then propose hypotheses respectively. Then, I make an empirical test on the data of sample firms. According to the research, I found that: ① In the corporate equity financing costs, the higher environmental accounting information disclosure quality, the smaller the cost of equity capital is, which provided sufficient empirical evidence to improve the quality of corporate disclosure of environmental accounting information to attract investors.②In the corporate debt financing costs, the higher environmental accounting information disclosure quality, the smaller the cost of debt financing is, which provided sufficient empirical evidence to attract capital from the creditors via improving the quality of corporate disclosure of environmental accounting information. ③In the total cost of corporate finance, the higher environmental accounting information disclosure quality, the smaller the total cost of financing is, which provided sufficient empirical evidence to improve the quality of corporate disclosure of environmental accounting information to attract investors and creditors. Finally, I give constructive advice which is based on research findings to government policy making and regulatory agencies, the listed companies and stakeholders. In addition, I also propose the probable directions to the future study.This thesis consists of six parts:The first part is the introduction part. Regarding the environment accounting information disclosure quality and financing costs, this section describes the research background, research significance, research ideas and the innovation of this article.The second part is the literature review. It is made up of two parts. First of all, through the channels and means of the environmental accounting information disclosure I review the related research results at home and abroad, followed by carding the related literature from equity financing costs and debt financing costs. After that, I point out the flaws of the existing research, and finally proposed research direction.The third part is the relevant theories. I first define the concepts of the environmental accounting, environmental accounting information disclosure and financing costs. Secondly I introduce the relevant theories. The theories about the environmental accounting information disclosure motivation include:corporate social responsibility theory, sustainable development theory, asymmetric information theory, stakeholder theory, agency theory and the theory of decision-useful; the theories about the relationship between the environmental accounting information disclosure and the financing costs include:signaling theory, the theory of over-disclosure of income, the economic consequences of the theory. It paves the way for the following hypothesis.The fourth part is the empirical study design. This section introduces the research hypothesis, sample selection and data sources and model building.The fifth part is the empirical analysis and results. This part contains the descriptive statistics, correlation analysis and multiple regression analysis of variables. It has tested the China’s listed companies and discloses that environmental accounting information could affect the quality of the cost of equity financing, debt financing costs and total cost of financing. Finally, I make robustness tests to test the reliability of the regression results.The last part contains research conclusion, policy recommendations, the lack of research and the research prospect in the future.This article innovatively measured the environmental accounting information disclosure quality from sufficiency, significant and comparability dimensions, especially some of the disclosure caught the attention of investors and analysts, and index design is more reasonable. Through the perspective of the cost of financing, to explore the economic consequences of enterprises’environmental accounting information disclosure has certain innovation consciousness. In view of the current academic circles of the relationship between the environmental accounting information disclosure quality and the cost of financing is not clear, this thesis confirms that there is significant negative correlation between the environmental accounting information disclosure quality and equity financing costs, debt financing costs and total financing cost, which has certain research value.