Impact On Firm Value And Investor Confidence In Environmental Information Disclosure

Despite the fact that Chinese economics have achieved great breakthrough is delightful and valuable, we must not ignore the fact that the quality of economics hasn’t caught up with the rapid development of economics yet. Chinese economies still remains at extensive economic model level, which is high input, high emission, high consumption and low efficiency. Such economic reality is not in accordance with sustainable strategy under the socialist market economy with Chinese characteristics. To match economic quality with economic development speed, meanwhile to achieve harmonious coexistence between human being and nature, we should enhance the monitoring of environmental responsibilities of corporations and deduce their environmental poiiution activities; meanwhile to encourage environmental protections and energy&emission savings of corporations. One effective pathway is to improve our quality of environmental information disclosure. So here comes up questions:are corporations willing to disclose relevant operating environmental information? Can environmental disclosure quality be improved? Which benefits in corporation can be brought by improving the quality of environmental information disclosure?Scholars have been doing a number of positive and normative studies on the incentives of environmental information disclosure and the economic consequences brought by environmental disclosure during past decades. But in China, both theoretical and practical studies on environmental disclosure in capital market are still in the start stage, most of which are normative studies. On behalf of corporations themselves, I intend to discover whether the improvements of disclosure quality can bring any positive effects to corporations, through studies on the influence of environmental disclosure on corporate value and investor confidence. This article has broadened the research contents of environmental disclosure by tentative explorations on environmental disclosure and corporate value/investor confidence. Meanwhile, this article has also made suggestions on the improvements on corporate environmental information disclosure institutions and the quality of environmental disclosure.On the basis of sustainability theory, stakeholder theory and internalization of economic externality, we analyze the current situations of Chinese environmental disclosure by viewing and summarizing relevant literatures in both western and eastern nations, and we propose our assumptions:there’s a positive correlation between environmental disclosure and corporate value, and a negative correlation between environmental disclosure and investor confidence. We have chosen151sample companies listed under Shenzhen Stock Exchange that joint in2010and2011CSR index constituent stock, so as to find out the influence of environmental disclosure on investor confidence. Conclusions and discoveries will be summarized from the results of my positive study; then, sequent suggestions on institutions of current environmental disclosures in listed company and relevant departments will be made.Considering previous studies on environmental disclosure, we have identified a positive correlation between environmental disclosure and corporate value. Zhang (200x) also concluded that the increasing of information disclosure can increase reputation value of corporation, and there has been a positive correlation between reputation value and corporate value. Apart from that, we still identify a negative correlation between environmental disclosure and investor confidence, which is because some investors consider corporations to’blow up’positive environmental information and avoid negative information, which leads investors to make opposite decisions.