An Empirical Test Of The Relationship Between Environmental Disclosure And Financial Performance In Steel Industry

With the increasingly serious environmental pollution,haze occurs more and more frequent.Meanwhile,the public awareness of environmental protection is becoming stronger and stronger.As one of the important participant of social economy,corporations have taken more and more social responsibilities.Many famous companies was blamed because of the environmental pollution problems they made.Therefore,the enterprise's stakeholders are taking corporate disclosure of environmental information more seriously,and they hope companies can disclose more accurate environmental information in their public reports such as annual report and social responsibility reports.Steel industry is one of the 16 heavy polluting industries listed by the ministry of environmental protection.Our government and the public increasingly strengthen environmental protection consciousness to this industry's environmental information disclosure and put forward new requirements to this industry.Therefore,it is very meaningful to find and analyze the relevant relationship between environmental information disclosure and financial performances in the steel industry.This article through the way of combined theoretical analysis with empirical research analyze the relationship between environmental information disclosure and financial performance of the listed companies in the steel industry.In the theoretical part,this paper firstly introduces the research background and significance,and then introduce the domestic and foreign scholars' literatures about the relationship between environmental information disclosure and corporate financial performance and summarize those literatures,then this paper introduces the sustainable development theory,information asymmetry theory,stakeholder theory and signaling theory.After theoretical research,this paper use 28 companies in the steel industry who are listed in the Shanghai and Shenzhen Stock Exchange as research samples,and use Eviews8.0 to do empirical analysis,to discuss the relationship between the environmental information disclosure and corporate financial performance.In this paper,the author firstly use the content analysis method to construct the environmental information disclosure index as the independent variables,and then choose the enterprise scale,the top ten shareholders holding,the proportion of the tradable equities of total equity,and whether the chairman and general manager of the enterprises are the same person as control variables,the measure of enterprise operating capacity,profitability,solvency and growth ability which are total asset turnover,return on equity,asset-liability ratio and operating income growth rate respectively as dependent variable for empirical research.After the empirical test,this paper draw the conclusion that for the iron and steel industry listed company,the relationship between environmental information disclosure level and the financial performance is positive.In this paper,it means that the relationship between environmental information disclosure and the total asset turnover,return on equity,and operating income growth rate are positive and the relationship between environmental information disclosure level and the asset-liability ratio is negative.It also suggests that for the listed companies in the steel industry,if the environmental information disclosure quality is higher,it is more likely that the stakeholders will receive positive signals and will give more support to the company and also the investors will trust the company more.There are two main innovations in this paper.Firstly,the innovation of research industry.This paper use 28 companies in the steel industry who are listed in the Shanghai and Shenzhen Stock Exchange as research samples.In existed domestic researches,scholars have use the steel industry only and the listed companies in this industry as research samples.Most scholars use whole listed companies in the 16 kinds of heavy pollution industry as research samples,and ignore the characteristics of the industry.Secondly,the innovation of the explanatory variables.In existed research,most scholars choose single enterprise performance measure or some aspects of enterprise financial performance measure as explained variable,such as tobin Q value,EVA,ROE,etc.This paper uses two dependent variables which are return on assets and return on invested capital to constructs two models,and to make research on the relationship between environmental information disclosure and corporate financial performances.