The effect of ultimate ownership on the disclosure of environmental information

This study empirically examines whether environmental information disclosure (EID) is influenced by the characteristics of a firm's ultimate owners. Based on the EID of publicly listed firms in China, we qualitatively measure the quality of EID of each firm and link those quality scores to firm...

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Bibliographic Details
Main Authors: WANG, Peng, WANG, Fangjun, HU, Nan
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2018
Subjects:
Online Access:https://ink.library.smu.edu.sg/sis_research/8046
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Institution: Singapore Management University
Language: English
Description
Summary:This study empirically examines whether environmental information disclosure (EID) is influenced by the characteristics of a firm's ultimate owners. Based on the EID of publicly listed firms in China, we qualitatively measure the quality of EID of each firm and link those quality scores to firm characteristics to understand the determinants of EID. We further link the EID scores to market valuation of the firm through the Ohlson valuation model to understand whether the market appreciates EID. Our results show that EID is more likely for government-controlled firms, firms with less hierarchy in their ultimate ownership and firms with more discrepancy between voting rights and cash flow rights. Our results also indicate that the stock market appreciates environmental issues and that EID itself, as well as disclosure quality, is associated with a higher market valuation. Our results still hold with the endogeneity issue controlled.