Research On The Impact Of Environmental Information Disclosure On Financing Cost

Economic development has brought a lot of convenience to people’s life, meanwhile the living environment has been destroyed. After 1980, people pay more and more attention to environmental protection. People gradually reflect, in the development of the economy, the protection of the environment should be gradually strengthened. Since 2007, the government has issued regulations to guide and constrain the listing Corporation’s environmental information disclosure behavior, thus forming the listing Corporation’s environmental information disclosure system. Therefore, we need to solve the important problem which is how to make the company’s environmental information disclosure system more perfect, so as to make the listing Corporation’s environmental information disclosure quality higher and higher.This paper selects 2007-2014 A-share heavy pollution of listed companies as a sample, through the normative and empirical research test impact on the financing cost of information environment. By analyzing present listed companies’ environmental information disclosure quality, to find out the important factors which influence of listed corporation’s financing cost. This study is in order to make listed company to improve the environmental information disclosure quality and reduce financing costs.First of all, this article defines the concept of environmental information disclosure, equity capital costs and debt financing costs, refers to the domestic and foreign researches and measure methods of information disclosure, the equity capital costs and the debt financing costs, and chooses the suitable surrogate markers of the as explanatory variables, uses normative research method to explain the basic theory of the impact of environmental information disclosure on financing costs, including principal agent theory. Then this paper analyzes the institutional background of environmental information disclosure and the mechanism of environmental information disclosure on the costs equity financing and debt financing, to provides theoretical basis for the following hypothesis and the establishment of the model.On the basis of previous studies, this paper explores to establish the evaluation system of environmental information disclosure quality, including 24 evaluation indexes, basing on the significance and the sufficiency of the information disclosure quality evaluation. Then evaluate scores of 24 indexes according to the quality of disclosure of listed companies environmental disclosure report through CNINFO website, and makes comparison of those companies. In addition, the paper use economic growth model measuring equity financing costs, debt financing costs dividing total liabilities to measure the debt financing cost. Control variables included two parts, the first five variables are to measure the control variables related to the costs of equity financing and debt financing, including the scale of the company, and the second part are three control variables of calculating the cost of equity financing and three control variables of calculating the cost of debt financing. Three hypotheses were proposed through the normative study. The first two hypotheses verify the correlation between environmental information disclosure and the two financing costs by using linear regression model. In the test of the third hypotheses, design a selection model, the introduction of virtual variables to verify the difference of the environmental information disclosure on equity financing costs and debt financing costs.The empirical results show that the quality of environmental information disclosure and the costs of equity financing and debt financing are negatively correlated, which means that improving the quality of environmental information disclosure can reduce the cost of corporate finance. In addition, by differences research, the cost of equity financing are more sensitive to changes in quality of environmental information disclosure, this further illustrates, shareholders are more dependent on the listed company’s environmental information disclosure than creditors, so the enterprise must make improvement of the environment information disclosure quality, to protect the interests of equity investors, to effective the enthusiasm of shareholders, in the end, makes listed companies equity financing and debt financing cost reduced and improve the efficiency of capital market financing. In addition, in the regression results of the control variables, it is observed that the cost of equity financing and corporate growth, business risk and financial risk of these three variables are positively correlated. And financial risk and operating risk and debt financing costs are significantly positively correlated. Finally, the paper puts forward the suggestions are that regulators should improve and environmental information disclosure of relevant laws and regulations, gradually establish environmental information disclosure third-party authentication system and standard, and constructs the system of evaluation of a standard to measure the level of listed companies’ environmental information disclosure; in addition, environmental performance evaluation should be added to the enterprise performance evaluation. Company also should improve the quality of environmental information disclosure, the establishment of environmental information disclosure system to adapt to the company. On the public level, shareholders should pay great attention to disclose of environmental information in the listing Corporation and fully supervise their behavior. In addition, the study of this paper shows that shareholders are more sensitive to the environmental information disclosure of the company than the creditors, so the interests of shareholders should be protected more carefully.