Environmental Disclosure Behavior and Capital Market Reaction to Disastrous Environmental Accidents: An Empirical Test of Legitimacy Theory in China
Corporate environmental disclosure in annual report might influence the assessment of capital market participants on a firm earnings and cash flows. This study examines disastrous environmental accidents impacts on the share price and environmental disclosure behavior of intra-industry companies. Our empirical evidences indicate that, following four of the accidents, the CAR of sample firms are significantly negative, and sample firms provided significantly more environmental disclosure in their current and next annual reports than they did two years prior to the accident occurrence. However, we do not find that the CAR is significantly associated with the environmental disclosure of preceding two years. Therefore, the capital market negatively reacts to the threats to companies legitimacy and exposure to future more regulatory costs, corporate environmental disclosures are largely explained as self-interest behavior legitimizing their ongoing existence and responses to public pressure.
Disastrous Environmental Accidents in China Capital Market Reactions Corporate Environmental Disclosures in Annual Report Legitimacy Theory
ZHANG Guoqing XIAO Hua
Center for Accounting Studies, and School of Business, Xiamen University, China, 361005
国际会议
The 5th International Sympsium for Corporate Governance(第五届公司治理国际研讨会)
天津
英文
314-323
2009-09-01（万方平台首次上网日期，不代表论文的发表时间）