Does environmental information disclosure make financial markets more informative? Evidence from China

Yongliang Yang, Jitao Zhang, Changting Song, Yingying Wu and Bingbing Zhang

Journal of Contemporary Accounting and Economics, 2025, vol. 21, issue 2

Abstract: We investigate the effect of environmental information disclosure on the information content of stock prices using data from Chinese-listed companies from 2008 to 2020. We find the following: (1) Environmental information disclosure can increase the information content of future cash flows in stock prices. This effect is long-term, not short-term. (2) This effect is more pronounced in state-owned enterprises, firms with higher institutional ownership and lower management ownership. Voluntary and soft disclosures have a significant effect on stock price informativeness. (3) Environmental information disclosure helps management obtain more investment information from stock prices and promotes the real investment efficiency of enterprises. This research is of great significance for the correct understanding of corporate ESG practices and improvements to the efficiency of capital market allocation.

Keywords: Environmental information disclosure; Price efficiency; Stock price information content; Forecasting Price Efficiency; Revelatory Price Efficiency (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:21:y:2025:i:2:s1815566925000153

DOI: 10.1016/j.jcae.2025.100468

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