Environmental information disclosure and firm production: evidence from the estimated efficiency of publicly listed firms in China

Yunguo Lu and Lin Zhang
Additional contact information
Yunguo Lu: Zhejiang Sci-Tech University

Journal of Productivity Analysis, 2023, vol. 59, issue 1, No 6, 99-119

Abstract: Abstract This study employs the recently developed conditional nonparametric frontier approach to assess the impact of environmental expenditures associated with environmental information disclosure (EID) on the production of China’s listed manufacturing firms from 2010 to 2018. An inverted U-shaped relationship is found between environmental expenditures and firms’ productive efficiency. Increasing expenditure on pollution control initially lowers the production efficiency at firm level, and indicates the negative impacts of regulatory costs attributable to the resources devoted to EID-related activities. However, a firm’s production efficiency increases with environmental expenditure after a certain threshold, which implies that the regulatory costs can be fully offset by triggering innovation. The co-existence of the traditional view of the negative impacts of environmental regulation on production and the positive impacts of Porter-type innovation explains the mixed empirical evidence in the literature. Government subsidies help firms to cover the regulatory costs and support a smooth transition to a Porter-type innovation regime. We also find that continuous environmental investments beyond the threshold can narrow the efficiency gap between firms in the same industry, bringing about additional societal spillover impacts. Our findings thus deepen the understanding on how regulations such as EID affect the economic performance of public firms.

Keywords: Environmental information disclosure; Efficiency; Nonparametric location-scale regression; Government subsidy; Porter hypothesis; D24; H23; Q58 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11123-022-00655-y Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jproda:v:59:y:2023:i:1:d:10.1007_s11123-022-00655-y

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11123/PS2

DOI: 10.1007/s11123-022-00655-y

Access Statistics for this article

Journal of Productivity Analysis is currently edited by William Greene, Chris O'Donnell and Victor Podinovski

More articles in Journal of Productivity Analysis from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().