Research On The Impact Of Local Government Financial Competition On The Quality Of Environmental Information Disclosure

The disclosure of environmental information(EID)by enterprises is an important performance of fulfilling social responsibility.At present,EID by enterprises in China is still in the voluntary stage,with low overall level and uneven quality.In the environment decentralization governance system,the local government is responsible for the supervision of the environmental behavior of enterprises in the jurisdiction,so the attitude of the local government will affect the EID of enterprises.According to the theory of "Race to the Bottom" of environmental regulation,the state or local government will compete to relax the environmental regulation for the sake of interests.Under the political system of fiscal decentralization and promotion competition in China,local governments have the possibility of "Race to the Bottom" by secretly reducing the environmental regulations of enterprises in order to obtain fiscal revenue and promote capital.Therefore,it is of great theoretical and practical significance to explore the role of local government financial competition in the quality of EID.In this paper,the listed companies of heavy pollution industry in China from 2012 to 2016 are taken as the research objects.The environmental information disclosure data of listed companies are collected manually,and using content analysis method.This paper constructs the index system from two aspects of soft disclosure and hard disclosure,comprehensively evaluates the quality of disclosure.Among them,soft disclosure refers to matters that cannot be expressed through monetary information,while hard disclosure refers to matters that can be expressed through specific monetary information.Secondly,based on literature review and theoretical analysis,this paper uses hierarchical linear model(HLM)to study the mechanism of financial competition and enterprise characteristics on the quality of EID.In this model,the regression coefficient is divided into fixed part and random part,it can explain whether the impact on EID comes from the regional level or the company level.The main conclusions are as follows:(1)The overall level of EID quality of enterprises in China is low,and there are significant differences between different provinces and industries.(2)At the level of internal characteristics of enterprises,the nature,scale and profitability of enterprises have a significant impact on the EID.(3)In the aspect of external factors of enterprises,local government financial competition has not only directed but also indirect effects on EID.(4)The impact of local government financial competition on EID will not be affected by the nature of enterprise equity,and the impact on state-owned enterprises and non-state-owned enterprises is similar.According to the conclusion of this paper,it is suggested to improve from five aspects:First,deepen the reform of the central government’s fiscal and tax system,reduce the expenditure of local government’s power and alleviate the local government’s fiscal deficit by increasing the revenue of local government’s financial power.Second,improve the performance evaluation mechanism of local governments,and restrict the behavior of local governments by establishing an objective investigation system of environmental responsibility and promoting the institutionalization of environmental inspection and accountability mechanism.Third,strengthen the environmental supervision of local governments,and prevent the occurrence of environmental pollution incidents and hidden reports by increasing the illegal cost of enterprises.Fourthly,to perfect the system of EID,we can clearly stipulate the content and form of EID through legislation.Fifthly,enhance the public awareness of EID,build a public supervision environment by strengthening environmental protection publicity,and force enterprises to actively disclose environmental information.