The Substitution Effect Between Environmental Information Management And Earnings Management

With the awareness of environmental protection improving,the government promulgated the relevant laws and the companies become interested in environmental information disclosure.Based on the discretion of environmental information disclosure,the managers may disclose environmental information discretionarily,which result in non-financial information manipulation.With the implementation of the "Environmental Information Disclosure for Trial Implementation",the enterprises began to pay attention to environmental information disclosure,so strengthen the manipulation of environmental information disclosure.The managers distract their attention from earnings management to non-financial information manipulation.As the two aspects of corporate information manipulation(financial and non-financial information),earnings management and environmental information disclosure management have certain relationship.Based on this background,the paper explores the relationship between earnings management and environmental information management when public pressure changes.The paper reviewed the literature of earnings management,environmental information disclosure,discretionary environmental information disclosure and analyzed the relationship between earnings management and environmental information management based on institutional theory,legitimacy theory,stakeholder theory and signal theory.Then the paper carried out the empirical analysis and used the two-stage least squares method to test the relationship between earnings management and environmental information management before and after the implementation of the "Environmental Information Disclosure for Trial Implementation".After that,this paper explored the relationship in the two different industries in order to explore the differences between the heavily polluting and non-polluting industries.The article also carried out a series of robustness test.Finally,this paper analyzed the economic consequences of environmental information management from three perspectives:equity refinancing,debt financing and enterprise value.Through empirical analysis,we found that there was no significant relationship between earnings management and environmental information management before the implementation.But there is a significant negative correlation between earnings management and environmental information management after the implementation.Thus,it is verified that under the pressure of public policy,the manipulation behavior has different relationship.Through the analysis of different industries,we found that the relationship in the heavily polluting industries was negative significantly higher.According to the economic consequences of environmental information management,environmental information management could significantly promote corporate refinancing,and was positively correlated to enterprise value.Finally,in view of the conclusion of this paper,we suggested that stakeholders should pay attention to the environmental information management while paying attention to earnings management.Based on the change of environmental policy in our country,this paper discussed the relationship between earnings management and environmental information management in different periods from the perspective of public pressure,expanded the relevant study,and provide a basis for the relationship between financial information and non-financial information.