“Disclosure more” or “authentic effort”: an empirical investigation of Chinese companies after being imposed with environmental administrative penalties

Xiangan Ding ()
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Xiangan Ding: Liaoning Normal University

Economic Change and Restructuring, 2025, vol. 58, issue 1, No 15, 24 pages

Abstract: Abstract The existing literature lacks insight into what environmental practices companies adopt after receiving environmental administrative penalties. Utilizing data from Chinese listed companies, the study employs propensity score matching method to analyze the impact of environmental administrative penalties on corporate environmental practices. Results indicate that such environmental penalties deter authentic environmental efforts of companies, instead prompting symbolic gestures. Specifically, environmental penalties spur increased environmental disclosures in non-heavily polluting sectors, with higher penalties correlating with greater disclosure. However, in heavily polluting industries, penalties fail to significantly enhance environmental disclosures. This suggests that penalized companies prioritize superficial compliance over substantive environmental action, with penalized firms engaging in increased environmental disclosure as a response to legitimacy threats. Overall, this research contributes to understanding the complex dynamics between environmental regulations, corporate behavior, and disclosure practices, providing valuable insights for policymakers and stakeholders involved in environmental governance and regulation.

Keywords: Corporate environmental practices; Environmental disclosure; Environmental administrative penalties; Corporate legitimacy (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10644-025-09856-5

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