Carbon Disclosure,Financial Transparency,and Agency Cost: Evidence from Chinese Manufacturing Listed Companies |
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| Authors: | Zhifang Zhou Hong Zhou Danlu Peng Xiao-hong Chen Shi-hui Li |
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| Affiliation: | 1. School of Business, Central South University, Changsha, Hunan, China;2. Collaborative Innovation Center of Resource-Conserving and Environment-friendly Society and Ecological Civilization, Central South University, Changsha, Hunan, China;3. Mobile E-business Collaborative Innovation Center of Hunan Province, Hunan University of Commerce, Changsha, Hunan, China;4. Key Laboratory of Hunan Province for Mobile Business Intelligence, Hunan University of Commerce, Changsha, Hunan, China |
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| Abstract: | Given the constraints on carbon emissions due to their impact on global warming, carbon disclosure has become an important way to deliver signals to the market. We examine the benefits associated with carbon disclosure from the standpoint of corporate social responsibility (CSR) for China’s manufacturing industries from 2010 to 2014. We divide corporations into heavily polluting and non-heavily polluting groups in order to control the industry factor. Based on the Principal-Agent Theory, we empirically test the relationship between carbon disclosure and financial transparency, and we evaluate the effect of carbon disclosure on agency costs and operations. Our results highlight that carbon disclosure is negatively associated with agency costs. However, we do not find enough evidence to prove what role financial transparency plays in the relationship between carbon disclosure and agency cost. Therefore, the influence of financial transparency as a mechanism is not yet clear. This study provides a way to look at the intentions of firms that disclose carbon information, and it also enhances the literature on carbon disclosure and agency costs in China based on Chinese data. |
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| Keywords: | agency cost carbon disclosure，China financial transparency，manufacturing listed companies |
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