The impact of corporate environmental information disclosure on stock price crash risk——based on the perspectives of institutional investors and financing constraints

Weixue Lu (), Zhaohan Bao () and Kai Wang ()
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Weixue Lu: Anhui Agricultural University, School of Information and Artificial Intelligence
Zhaohan Bao: Anhui Agricultural University, School of Economics and Management
Kai Wang: Anhui Agricultural University, School of Information and Artificial Intelligence

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 11, No 91, 28307 pages

Abstract: Abstract Exploring the influence of corporate environmental information disclosure on stock price crash risk from the perspective of institutional investors and financing constraints is essential for reducing information asymmetry and mitigating stock price crash risk. This paper empirically examines a sample of non-financial A-share listed companies in China from 2012 to 2022 to determine the influence of environmental information disclosure on stock price crash risk and to determine the moderating roles of institutional investors and financing constraints via panel regression. Additionally, this study analyses heterogeneity across various industry types and ownership structures. The results show that (1) environmental information disclosure exhibits a significant negative correlation with stock price crash risk. For instance, after controlling for other covariates, the estimated effects of environmental information disclosure on the negative return skewness coefficient (NCSKEW) and the ratio of upwards and downwards fluctuations in returns (DUVOL)are − 0.027 and − 0.021, respectively. Environmental information disclosure can reduce stock price crash risk through the information path and the reputation path. (2) Both an increase in institutional investor ownership and an improvement in the level of financing constraints weaken the negative relationship between environmental information disclosure and stock price crash risk. For example, for institutional investor ownership, the estimated coefficients of the interaction term L_INST*L_EID on NCSKEW and DUVOL are 0.082 and 0.052, respectively. (3) The negative influence of environmental information disclosure on stock price crash risk is more pronounced for non-heavy polluter firms and non-state-owned enterprises. On the basis of these results, relevant policy recommendations are proposed to mitigate stock price crash risk.

Keywords: Environmental information disclosure; Stock price crash risk; Institutional investors; Financing constraints (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10668-025-06519-3

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