Impact of excessive environmental information disclosure on stock price crash risk
Contact us if these videos are not relevant.
Contact us if these videos are not relevant.
View abstract on PubMed
Summary
This summary is machine-generated.Excessive environmental information disclosure, or greenwashing, by Chinese companies increases stock price crash risk. Improving corporate governance can enhance disclosure quality and mitigate this risk.
Area Of Science
- Environmental, Social, and Governance (ESG) Studies
- Corporate Finance
- Information Economics
Background
- Growing emphasis on carbon peak and carbon neutrality (
- dual carbon
- ) goals necessitates robust corporate environmental disclosure.
- Imperfect regulations may incentivize companies to over-disclose environmental information, potentially leading to stock price instability.
- Greenwashing, characterized by non-substantive or embellished environmental disclosures, poses a risk to market transparency.
Purpose Of The Study
- To investigate excessive environmental information disclosure practices among Chinese A-share listed companies.
- To examine the relationship between greenwashing in environmental textual disclosures and stock price crash risk.
- To identify corporate governance mechanisms that can improve environmental disclosure quality and reduce over-disclosure.
Main Methods
- Analysis of social responsibility reports from Chinese A-share firms (2015-2023).
- Application of threshold effect and quantile regression models to detect greenwashing.
- Utilization of a panel fixed-effects model to assess the impact of excessive disclosure on crash risk.
Main Results
- Corporate environmental disclosures often contain greenwashing elements, significantly increasing stock price crash risk, especially in manufacturing.
- Excessive textual disclosure degrades information quality and transparency, fostering irrational investment.
- Effective environmental disclosure practices were found to mitigate crash risk.
Conclusions
- Greenwashing in environmental disclosures amplifies stock price crash risk by reducing information quality.
- Reducing ownership concentration, increasing managerial shareholding, and strengthening independent directors' roles can improve disclosure quality.
- Practical insights are offered for investors and policymakers to guide rational decision-making and promote genuine environmental responsibility.
Contact us if these videos are not relevant.
Contact us if these videos are not relevant.
Related Concept Videos
A heuristic is a general problem-solving framework (Tversky & Kahneman, 1974). You can think of these as mental shortcuts that are used to solve problems. Different types of heuristics are used in different types of situations, and the impulse to use a heuristic occurs when one of five conditions is met (Pratkanis, 1989):
When one is faced with too much information
When the time to make a decision is limited
When the decision to be made is unimportant
When there is access to very...
Post-marketing surveillance is a critical component of pharmaceutical regulation, often uncovering unanticipated adverse drug reactions (ADRs) once a drug is widely used over an extended period.
This process, termed pharmacovigilance, aims to detect, evaluate, and minimize harmful effects related to medication use. The data collection for pharmacovigilance depends on spontaneous reporting systems, where healthcare professionals or patients voluntarily report suspected ADRs.
In some cases, there...
Biopharmaceutical studies constitute a vital field aiming to enhance drug delivery methods and refine therapeutic approaches, drawing upon diverse interdisciplinary knowledge. In research methodologies, the choice between controlled and non-controlled studies significantly influences the study's reliability and accuracy.
Non-controlled studies, commonly employed for initial exploration, lack a control group, rendering them susceptible to biases and external influences. In contrast,...
Information is everywhere and its presentation—such as how and when items are presented—can impact our perceptions and decisions surrounding the info. This broad concept umbrellas framing effects—influences that occur due to the way information is framed in its appearance, whether it’s purely the order or the specific wording of a message. Let’s take a look at numerous ways in which two versions of something can objectively say the same thing, yet we respond in...
An ecological disturbance is a temporary disruption in the environment resulting from abiotic, biotic, or anthropogenic factors, causing a pronounced change in an ecosystem. The impact of an ecological disturbance, which can depend on its intensity, frequency, and spatial distribution, plays a significant role in shaping the species diversity within the ecosystem.
Ecological disturbances can be caused by an event as small as the trampling of underbrush to an incident as wide-ranging as a...
Throughout its ~4.5 billion year history, the Earth has experienced periods of warming and cooling. However, the current drastic increase in global temperatures is well outside of the Earth’s cyclic norms, and evidence for human-caused global climate change is compelling. Paleoclimatology, the study of ancient climate conditions, provides ample evidence for human-caused global climate change by comparing recent conditions with those in the past.
Past Periods of Warming and Cooling
In...