The Level Of Environmental Information Disclosure,Stock Liquidity And The Cost Of Equity Capital

The level of information disclosure is an important influence factor of the cost of equitycapital in the listed company because of information asymmetry in the capital markets. As akind of specific information, the study of the effect of the level of environmental informationdisclosure on the cost of equity capital is rare. The relationship between the level ofenvironmental information disclosure and the cost of equity capital and the difference of thetwo under different supervision level and conduction effect of stock liquidity between the twoare inspected under the reality circumstances of the low level of environmental informationdisclosure of listed companies of the heavy pollution industry and the imperfect regulatorypolicy in our country.First of all, according to the information asymmetry theory, stakeholder theory, corporatesocial responsibility theory, decision-making useful theory, stock liquidity hypothesis andforecast risk hypothesis, the theory foundation of the level of environmental informationdisclosure reduce the cost of equity capital and the logic framework of the level ofenvironmental information disclosure, stock liquidity and the cost of equity capital areanalyzed and combed systematically. Secondly, the listed companies of heavy pollutionindustry in China from2009to2011are selected as the research objects in this paper, multipleregression analysis, independent sample t-test, intermediary effect test are used to inspect theeffect of the level of environmental information disclosure on the cost of equity capital, theregulating effect of the supervision level on relationship between the level of environmentalinformation disclosure and the cost of equity capital, and the effect produced by stock liquidityof the level of environmental information disclosure on the cost of equity capital. According tothe practical situation of the listed company in our country, content analysis method by whichget the information disclosure index through analyzing of annual reports and the socialresponsibility report of listed companies and a set of evaluation system including sevendimensions is adopted to assess the level of environmental information disclosure level andPEG model is selected to calculate the cost of equity capital in the paper. It’s found that thelevel of environmental information disclosure can reduce the cost of equity capital significantly,supervision level has positive adjustment effect in the degree of lowering the cost of equitycapital by raising the level of environmental information disclosure, and intermediate effect ofstock liquidity has been examined.Based the impact of the business activities on the environmental in listed companies ofheavy pollution industry and the reality of the capital market in China, the influencemechanism of the level of environmental information disclosure, stock liquidity and the cost of equity capital and the regulating effect of supervision level are tested in this paper. in which theregulation influence of regulation, to, pertinent literature an be enriched to a certain extent, andlay a foundation for improving the level of environmental information disclosure, easing theinformation asymmetry, improving the stock liquidity and decreasing the cost of equitycapital of listed companies.