Abstract
Based on the institutional theory, this article attempts to examine two consecutive questions regarding the impact of various factors on corporate decision in environmental information disclosure (EID): (1) whether or not to disclose; and (2) the level of disclosure. The relevance of these factors is empirically tested using data collected from publicly listed manufacturing companies from 2006 to 2008 in China. Some interesting findings appear. We find that firms that are state-owned, those that operate in environmentally sensitive industries, those having more industrial peers engaged in EID, and those with better reputation are more likely to disclose environmental information. When it comes to the content of EID, variables that attempt to capture external institutional pressures exhibit either no or weak explanatory power. Only the variable of organizational image and reputation is demonstrated to have a significant impact on both the act and the content of EID. This study provides a snapshot of the dialogues between constituencies in the organizational field and EID development.
Similar content being viewed by others
Notes
The authors gratefully acknowledge the very helpful suggestions given by one of anonymous referees.
The CSMAR data set is prepared by the China Accounting and Finance Research Center of Hong Kong Polytechnic University and Shenzhen GTI Financial Information Limited.
References
Aerts, W., Cormier, D., & Magnan, M. (2008). Corporate environmental disclosure, financial markets and the media: An international perspective. Ecological Economics, 64(3), 643–659.
Albuquerue, R., & Wang, N. (2008). Agency conflicts, investment, and asset pricing. Journal of Finance, 63(1), 1–40.
Blanco, E., Rey-Maquieira, J., & Lozano, J. (2009). The economic impacts of voluntary environmental performance of firms: a critical review. Journal of Economic Surveys, 23(3), 462–502.
Boiral, O. (2003). ISO 9000, outside the iron cage. Organization Science, 14(6), 720–737.
Boiral, O. (2007). Corporate greening through ISO 14001: a rational myth? Organization Science, 18(1), 127–146.
Brammer, S. J., & Pavelin, S. (2006). Voluntary environmental disclosures by large UK companies. Journal of Business Finance & Accounting, 33(7/8), 1168–1188.
Cho, C. H., & Patten, D. M. (2007). The role of environmental disclosures as tools of legitimacy: A research note. Accounting, Organizations and Society, 32(7/8), 639–647.
Claessens, S., Djankov, S., Fan, J. P. H., & Lang, L. H. P. (2002). Disentangling the incentive and entrenchment effects of large shareholdings. Journal of Finance, 57(6), 2741–2771.
Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2008). Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society, 33(4/5), 303–327.
Cormier, D., & Gordon, I. M. (2001). An examination of social and environmental reporting strategies. Accounting, Auditing & Accountability Journal, 14(5), 587–616.
Cormier, D., & Magnan, M. (2007). The revisited contribution of environmental reporting to investors’ valuation of a firm’s earnings: An international perspective. Ecological Economics, 62(3/4), 613–626.
Coulson, A. B. (2007). How should banks govern the environment? Challenging the construction of action versus veto. Business Strategy and the Environment, 18(3), 149–161.
Criado-Jimenez, I., Fernandez-Chulian, M., Larrinage-Gonzalez, C., & Husillos-Carques, F. J. (2008). Compliance with mandatory environmental reporting in financial statements: The case of Spain (2001–2003). Journal of Business Ethics, 79(3), 245–262.
CSMAR. (2009). China Accounting and Finance Research Center of the Hong Kong Polytechnic University and the Shenzhen GTI Financial Information Limited.
Dasgupta, S., Hong, J. H., Laplante, B., & Mamingi, N. (2006). Disclosure of environmental violations and stock market in the Republic of Korea. Ecological Economics, 58(4), 759–777.
Delmas, M. A. (2002). The diffusion of environmental management standards in Europe and in the United States: An institutional perspective. Policy Sciences, 35(1), 91–119.
Delmas, M. A., & Toffel, M. W. (2008). Organizational responses to environmental demands: opening the black box. Strategic Management Journal, 29(10), 1027–1055.
Diao, X. D., Zeng, S. X., Tam, C. M., & Tam, Vivian W. Y. (2009). EKC analysis for studying economic growth and environmental quality: a case study in China. Journal of Cleaner Production, 17(5), 541–548.
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.
DiMaggio, P. J., & Powell, W. W. (1991). Introduction. In W. W. Powell & P. J. DiMaggio (Eds.), The new institutionalism in organizational analysis (pp. 1–38). Chicago: University of Chicago Press.
Evans, M. F., Gilpatric, S. M., & Liu, L. R. (2009). Regulation with direct benefits of information disclosure and imperfect monitoring. Journal of Environmental Economics and Management, 57(3), 284–292.
Fan, G., Wang, X. L., & Zhu, H. P. (2007). The marketization index in China. Beijing: Economy Science Press.
Graddy, D. B., & Strickland, T. H. (2007). Public information as a deterrent to environmental infractions. Applied Economics, 39(13), 1961–1972.
Gray, R. H., Javad, M., Power, D. M., & Sinclair, C. D. (2001). Social and environmental disclosure and corporate characteristics: A research note and extension. Journal of Business Finance and Accounting, 28(3/4), 327–356.
Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal, 8(2), 47–77.
Greenwood, R., & Hinings, C. R. (1996). Understanding radical organizational change: Bringing together the old and new institutionalism. Academy of Management Review, 21(4), 1022–1054.
Guler, I., Guillén, M. F., & Macpherson, J. M. (2002). Global competition, institutions, and the diffusion of organizational practices: the international spread of ISO 9000 quality certificates. Administrative Science Quarterly, 47(2), 207–232.
Guo, P. Y. (2005). Corporate Environmental Reporting and Disclosure in China, http://www.csr-asia.com/upload/environmentalreporting.pdf.
Gupta, A. (2008). Transparency under scrutiny: information disclosure in global environmental governance. Global Environmental Politics, 8(2), 1–7.
Hackston, D., & Milne, M. J. (1996). Some determinants of social and environmental disclosures in New Zealand companies. Accounting Auditing & Accountability Journal, 9(1), 77–108.
Hasseldine, J., Salama, A. I., & Toms, J. S. (2005). Quantity versus quality: the impact of environmental disclosure on the reputations of UK Plcs. The British Accounting Review, 37(2), 231–248.
Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and capital markets: A review of empirical disclosure literature. Journal of Accounting and Economics, 31(1/3), 405–440.
Hill, C., & Jones, G. (2008). Essentials of strategic management. USA: Cengage Learning.
Hoffman, A. (1999). Institutional evolution and change: environmentalism and the US chemical industry. Academy of Management Journal, 42(4), 351–371.
Hoffman, A. (2001). Linking organizational and field-level analyses. Organization & Environment, 14(2), 133–156.
Huang, C. L., & Kung, F. H. (2010). Drivers of environmental disclosure and stakeholder expectation: Evidence from Taiwan. Journal of Business Ethics, 96(3), 435–451.
Johnstone, N., & Labonne, J. (2009). Why do manufacturing facilities introduce environmental management systems? Improving and/or signaling performance. Ecological Economics, 68(3), 719–730.
Jose, A., & Lee, S. M. (2007). Environmental reporting of global corporations: A content analysis based on website disclosures. Journal of Business Ethics, 72(4), 307–321.
Kennedy, M. T., & Fiss, P. C. (2009). Institutionalization, framing and diffusion: The logic of TQM adoption and implementation decisions among U.S. hospitals. Academy of Management Journal, 52(5), 897–918.
King, A. A., Lenox, M. J., & Terlaak, A. (2005). The strategic use of decentralized institutions: exploring certification with the ISO 14001 management standard. Academy of Management Journal, 48(6), 1091–1106.
Kleindorfer, P. R., & Orts, E. W. (1998). Information regulation of environmental risks. Risk Analysis, 18(2), 155–170.
Konar, S., & Cohen, M. A. (2001). Does the market value environmental performance? The Review of Economics and Statistics, 83(2), 281–289.
Lee, K. W. (2007). Corporate voluntary disclosure and the separation of cash flow rights from control rights. Review of Quantitative Finance and Accounting, 28(4), 393–416.
Li, F. G., Xiong, B., & Xu, B. (2008). Improving public access to environmental information in China. Journal of Environmental Management, 88(4), 1649–1656.
Liu, X. B., & Anbumozhi, V. (2009). Determinant factors of corporate environmental information disclosure: an empirical study of Chinese listed companies. Journal of Cleaner Production, 17(6), 593–600.
Mizruchi, M. S., & Fein, L. C. (1999). The social construction of organizational knowledge: A study of the uses of coercive, mimetic, and normative isomorphism. Administrative Science Quarterly, 44(4), 653–684.
Ozen, S., & Kusku, F. (2009). Corporate environmental citizenship variation in developing countries: An institutional framework. Journal of Business Ethics, 89(2), 297–313.
Patten, D. M. (2002). The relation between environmental performance and environmental disclosure: a research note. Accounting, Organizations and Society, 27(8), 763–773.
Patten, D. M., & Trompeter, G. (2003). Corporate responses to political costs: an examination of the relation between environmental disclosure and earnings management. Journal of Accounting and Public Policy, 22(1), 83–94.
Qu, W., & Leung, P. (2006). Cultural impact on Chinese corporate disclosure-a corporate governance perspective. Managerial Auditing Journal, 21(3), 241–264.
Scheid-Cook, T. (1992). Organizational enactments and conformity to environmental prescriptions. Human Relations, 45(6), 537–554.
Scott, W. R. (1995). Institutions and organizations. London: Sage.
Scott, W. R. (2007). Institutional Theory: Contributing to a Theoretical Research Program. In Smith Ken G. & Hitt Michael A. (Eds.), Great minds in management: the process of theory development (pp. 460–484). Oxford, UK: Oxford University Press.
Shleifer, A., & Vishny, R. (1997). A survey of corporate governance. Journal of Finance, 52(2), 737–783.
Solomon, J. F., & Solomon, A. (2006). Private social, ethical and environmental disclosure. Accounting, Auditing & Accountability Journal, 19(4), 564–591.
Walden, W. D., & Schwartz, B. N. (1997). Environmental disclosures and public policy pressure. Journal of Accounting and Public Policy, 16(2), 125–154.
Wang, H., Bi, J., Wheeler, D., Wang, J. N., Cao, D., Lu, G. F., et al. (2004). Environmental performance rating and disclosure: China’s GreenWatch program. Journal of Environmental Management, 71(2), 123–133.
Whetten, D. A., & Mackey, A. (2002). A social actor conception of organizational identity nd its implications for the study of organizational reputation. Business and Society, 41(4), 393–414.
Wiseman, J. (1982). An evaluation of environmental disclosure mode in corporate annual reports. Accounting, Organizations and Society, 7(1), 53–63.
Wooten, M., & Hoffman, A. (2008). Organizational fields: past, present and future. In R. Greenwood, C. Oliver, R. Suddaby, & K. Sahlin-Andersson (Eds.), Handbook of organizational institutionalism. London: Sage Publications Ltd.
Xiao, H. (2006). Corporate environmental accounting and reporting in china: current status and the future. In: Schaltegger, S., Bennett, M. and Burritt, R. (Eds.), Sustainability Accounting and Reporting, 457–471.
Yin, H. T., & Ma, C. (2009). International Integration: A Hope for a Greener China? International Marketing Review, 26(3), 348–367.
Yin, H. T., & Schmeidler, P. (2009). Why Do Standardized ISO 14001 Environmental Management Systems Lead to Heterogeneous Environmental Outcomes? Business Strategy and the Environment, 18(7), 469–486.
Zeng, S. X., Liu, H. C., Tam, C. M., & Shao, Y. K. (2008). Cluster analysis for studying industrial sustainability: an empirical study in Shanghai. Journal of Cleaner Production, 16(10), 1090–1097.
Zeng, S. X., Meng, X. H., Yin, H. T., Tam, C. M., & Sun, L. (2010). Impact of cleaner production on business performance. Journal of Cleaner Production, 18(10/11), 975–983.
Zeng, S. X., Tam, C. M., Vivian, W. Y., & Deng, Z. M. (2005). Towards implementation of ISO 14001 environmental management systems in selected industries in China. Journal of Cleaner Production, 13(7), 645–656.
Zeng, S. X., Xie, X. M., Tam, C. M., & Wan, T. W. (2009). Relationships between business factors and performance in internationalization: An empirical study in China. Management Decision, 47(2), 308–329.
Acknowledgments
We would like to thank two anonymous referees for very helpful suggestions that substantially improved this article. This study was supported by the National Natural Science Foundation of China (No. 71025006) and the Ministry of Education of China (20090073110029).
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Zeng, S.X., Xu, X.D., Yin, H.T. et al. Factors that Drive Chinese Listed Companies in Voluntary Disclosure of Environmental Information. J Bus Ethics 109, 309–321 (2012). https://doi.org/10.1007/s10551-011-1129-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-011-1129-x