Institutional Investors' Holdings And Environmental Information Disclosure

In recent years,the frequent occurrence of environmental pollution accidents in China has attracted the attention of regulatory authorities and investors,and high-quality environmental information disclosure of enterprises can play a role of institutional guarantee for environmental protection and governance.Generally speaking,institutional investors have the ability to participate in corporate governance because they have more information and are more professional.Existing studies mainly focus on earnings management,corporate performance and other financial perspectives.However,little attention has been paid to whether institutional investors will monitor the quality of environmental information disclosure based on shareholder activism.Based on the institutional background of our country,this paper studies whether institutional investors' holdings can promote enterprises to improve the quality of environmental information disclosure from the perspective of shareholder activism,and explores whether the combined effect of institutional shareholding concentration can strengthen the relationship between institutional investors' holdings and environmental information disclosure.Firstly,this thesis reviews the background of environmental information disclosure and institutional investors' development system in China,based on principal-agent theory,shareholder activism theory,stakeholder theory,social responsibility theory and signal transmission theory.This paper constructs a theoretical analysis framework of the relationship between institutional investors' holdings and environmental information disclosure.Secondly,we construct a regression model to empirically test the relationship between institutional investors' holdings and the quality of environmental information disclosure as well as the path of action.We also test whether there are differences in the relationship between institutional investors' holdings and the quality of environmental information disclosure under different property rights.Then,we introduce the institutional ownership concentration as a moderating variable to explore whether the internal differences of institutional ownership can moderate the relationship between the institutional ownership ratio and environmental information disclosure.The results show that: the proportion of institutional ownership is significantly positively related to the quality of environmental information disclosure,and in state-owned enterprises,the role of supervision is more obvious;Path analysis shows that institutional investors play anactive role in environmental information disclosure by reducing agency costs.Further research finds that a higher concentration of institutional investors can enhance the positive correlation between their shareholding ratio and the quality of environmental information disclosure,that is,the “resultant force” effect of institutional investors can improve the effectiveness of corporate governance participation.Moreover,under the circumstances of high activity of institutional investors and high level of marketization,this regulatory role is more significant,which shows that institutional investors with high activity can play a better role of “resultant force”,and the better market environment is also more conducive to the exertion of shareholder activism effect.Finally,in order to improve the governance role of institutional investors,this paper proposes that we should improve laws and regulations,encourage and guide institutional investors to give full play to shareholder activism,optimize the internal structure of institutional investors,cultivate diversified institutional investors,and establish an orderly market mechanism.This study provides new evidence for the hypothesis of “effective supervision” of institutional investors from the perspective of corporate environmental responsibility,expands the relevant research on the influencing factors of environmental information disclosure.Besides,it also provides decision-making reference for improving the governance role of institutional investors.