Comparison Study Of Compulsory And Voluntary Carbon Disclosure

The Green House Effect becomes more and more serious these years,and now is one of the hottest topics around the globe.As the largest body in terms of carbon emission,China's government carries out a plan to decrease carbon emission per GDP by 18% and has announced to build a national carbon exchange market in 2017.As corporations are the most fundamental entities in an economy,their participation is substantial to the success of the carbon deduction plan.Reasonable and effective design of mechanism definitely can boost corporates' activeness in carbon deduction,so it is especially meaningful to discuss what kind of disclosure mechanism is more appropriate in current China,and to research on the different effects caused by various disclosure mechanisms.This paper compares the differences under the two mechanisms in disclosure quality and the value relevance of disclosure based on the manually collected carbon information disclosed by non-financial companies listed on A-share market between 2008 and 2014.We found that compulsory disclosure can improve the quality of carbon information,and both political connection and market openness affect carbon disclosure.For example,political connection has an inverse U-shaped relation to carbon disclosure.That is,when political connection is too low or too high,carbon disclosure is at a limited level,but when political connection is around average level,the corporate tends to disclose high-quality information.As for market openness,it has a positive relationship with carbon disclosure.In addition,both political connection and market openness have moderation effect on the relationship between carbon disclosure and compulsory mechanism.When political connection is at high or low level,compulsory disclosure's effect on carbon disclosure is weakened,but when it is at moderate level,compulsory disclosure is positively correlated with carbon information quality.Also,if a company operates in an open market,the correlation between compulsory disclosure and disclosure quality is weakened but that positive correlation is still significant in less open market.The research on carbon disclosure quality and corporate value reveals that high-quality carbon information does increase corporate value,but significance is weakened when under compulsory disclosure mechanism,which means investors depend more on voluntary information.The separate regression also confirms this conclusion,so it implies that currently,the content of carbon disclosure is not sufficiently interpreted by investors but only deemed as a positive signal released by the senior management.The result of this paper provides explanations for corporates' disclosure decisions,creates new clues for corporate carbon disclosure research,and offers theoretical support for government's design of disclosure scheme.