Firm location, political geography and environmental information disclosure

ABSTRACT

As the subjective and objective factors that influence corporate behaviours, political region and firm location are of great importance to environmental information disclosure (EID). With spatial and political geography as a research perspective, this article makes a study by using the samples of manufacturing listed companies from 2009 to 2011. As a result, we determine that regulatory distance and political geography had negative effects on EID, while political geography weakens regulatory distance’s function. After considering an enterprise’s administrative rank, we determined that when the rank is higher, regulatory distance has negative effects on EID; when the rank is lower, the effects are the opposite. Regarding political geography, it always weakened the regulatory distance’s function. Moreover, the effects are significant only when the enterprises had low governmental regulation. The study shows the effects that firm location and political geography have made on EID. At the same time, this study also gives theoretical and empirical evidence to the necessity of raising governmental regulatory effectiveness.

KEYWORDS:

• Location
• political geography
• environmental information disclosure
• administrative level
• local governmental regulation

JEL CLASSIFICATION:

• Q58
• L78

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ On 1 May 2008, SEPA issued the Measures for the Disclosure of Environment Information. In order to avoid its influence, we select the sample after 2008.

² There are 24 members in the seventeenth CPC Central Committee Political Bureau except Xilai Bo.

³ PITI is established by the Institute of Public and Environment Affairs and the Natural Resources Defense Council (NRDC) in order to measure the level of EID by the local government.

Additional information

Funding

This work was supported by National Natural Science Foundation of China under: [Grant Numbers 71572189 and 71102163]; China Postdoctoral Special Projects under: [Grant Number 2012T50502] and China Postdoctoral Science Foundation under: [Grant Number 2011M500977].