Abstract
Environmental sustainability is an important strategy for firms to expand market reach and space in pursuit of profitable growth. In the context of internationalization, environment information disclosure (EID) is considered an environmental signal released by a firm to external stakeholders. Using a sample of Chinese construction firms listed in the global Engineering News-Record (ENR), two periods, from 2008 to 2014 and 2015 to 2019, were set up from the perspective of the EID guideline changes. The regression results illustrate a negative relationship between EID and financial performance in the first period. The moderating effect of internationalization on the relationship between EID and financial performance changes from negative to positive over time. Quantile regressions further reveal how EID and internationalization affect firms at different levels of financial performance. This study proposed a periodic contingency perspective to reconcile the changes in the influence of EID on financial performance within the context of internationalization.
Similar content being viewed by others
Data availability
All data, models, or codes that support the findings of this study are available from the corresponding author upon reasonable request.
Notes
The authoritative academic journal in the global engineering and construction field, Engineering News-Record (ENR) is a ranking recognized by the international engineering community as a comprehensive reflection of annual international engineering market developments.
References
Ahmad N, Li HZ, Tian XL (2019) Increased firm profitability under a nationwide environmental information disclosure program? Evidence from China. J Clean Prod 230:1176–1187. https://doi.org/10.1016/j.jclepro.2019.05.161
Akinwande MO, Dikko HG, Agboola S (2015) Variance inflation factor: as a condition for the inclusion of suppressor variable(s) in regression analysis. Open J Stat 5(7):754–767. https://doi.org/10.4236/ojs.2015.57075
Ben Lahouel B, Ben Zaied Y, Managi S, Taleb L (2022) Re-thinking about U: the relevance of regime-switching model in the relationship between environmental corporate social responsibility and financial performance. J Bus Res 140(August 2020):498–519. https://doi.org/10.1016/j.jbusres.2021.11.019
Benito-Osorio D, Colino A, Guerras-Martín LÁ, Zúñiga-Vicente JÁ (2016) The international diversification-performance link in Spain: does firm size really matter? Int Bus Rev 25(2):548–558. https://doi.org/10.1016/j.ibusrev.2015.09.004
Bensoussan A, Diltz JD, Hoe SR (2010) Real options games in complete and incomplete markets with several decision makers. SIAM J Finan Math 1(1):666–728. https://doi.org/10.1137/090768060
Bruna MG, Loprevite S, Raucci D, Ricca B, Rupo D (2022) Investigating the marginal impact of ESG results on corporate financial performance. Finance Res Lett 47(PA):102828. https://doi.org/10.1016/j.frl.2022.102828
Busch T, Hoffmann VH (2011) How hot is your bottom line? linking carbon and financial performance. Bus Soc 50(2):233–265. https://doi.org/10.1177/0007650311398780
Campbell K, Mínguez-Vera A (2008) Gender diversity in the boardroom and firm financial performance. J Bus Ethics 83(3):435–451. https://doi.org/10.1007/s10551-007-9630-y
Chen Z, Xie G (2022) International review of financial analysis ESG disclosure and financial performance : moderating role of ESG investors. Int Rev Financ Anal 83(July):102291. https://doi.org/10.1016/j.irfa.2022.102291
Chiarvesio M, De Marchi V, Maria ED (2015) Environmental innovations and internationalization: theory and practices. Bus Strateg Environ 24(8):790–801. https://doi.org/10.1002/bse.1846
Christensen HB, Floyd E, Liu LY, Maffett M (2017) The real effects of mandated information on social responsibility in financial reports: evidence from mine-safety records. J Account Econ 64(2–3):284–304. https://doi.org/10.1016/j.jacceco.2017.08.001
Clarkson PM, Li Y, Richardson GD, Vasvari FP (2008) Revisiting the relation between environmental performance and environmental disclosure: an empirical analysis. Acc Organ Soc 33(4–5):303–327. https://doi.org/10.1016/j.aos.2007.05.003
Connelly BL, Certo ST, Ireland RD, Reutzel CR (2011) Signaling theory: a review and assessment. J Manag 37(1):39–67. https://doi.org/10.1177/0149206310388419
Cordazzo M, Bini L, Marzo G (2020) Does the EU Directive on non-financial information influence the value relevance of ESG disclosure? Italian evidence. Bus Strateg Environ 29(8):3470–3483. https://doi.org/10.1002/bse.2589
Crook TR, Ketchen DJ, Combs JG, Todd SY (2008) Strategic resources and performance: a meta-analysis. Strateg Manag J 29(11):1141–1154. https://doi.org/10.1002/smj.703
Darnall N, Ji H, Iwata K, Arimura TH (2022) Do ESG reporting guidelines and verifications enhance firms’ information disclosure? Corp Soc Responsib Environ Manag July 2021, 1–17. https://doi.org/10.1002/csr.2265
Fan L, Yang K, Liu L (2020) New media environment, environmental information disclosure and firm valuation: evidence from high-polluting enterprises in China. J Clean Prod 277:123253. https://doi.org/10.1016/j.jclepro.2020.123253
Fonseka M, Rajapakse T, Richardson G (2019) The effect of environmental information disclosure and energy product type on the cost of debt: evidence from energy firms in China. Pac Basin Financ J 54(May 2018):159–182. https://doi.org/10.1016/j.pacfin.2018.05.001
Gao Y, Feng Z, Zhang S (2021) Managing supply chain resilience in the era of VUCA. Front Eng Manag 8(3):465–470. https://doi.org/10.1007/s42524-021-0164-2
García-Benau MA, Sierra-Garcia L, Zorio A (2013) Financial crisis impact on sustainability reporting. Manag Decis 51(7):1528–1542. https://doi.org/10.1108/MD-03-2013-0102
Gentimir I-E, Gentimir R-A (2015) International competitiveness, growth and socio-economic development in India. Procedia Econ Finance 20(15):252–258. https://doi.org/10.1016/s2212-5671(15)00072-6
Gjergji R, Vena L, Sciascia S, Cortesi A (2021) The effects of environmental, social and governance disclosure on the cost of capital in small and medium enterprises: the role of family business status. Bus Strateg Environ 30(1):683–693. https://doi.org/10.1002/bse.2647
Goll I, Brown Johnson N, Rasheed AA (2008) Top management team demographic characteristics, business strategy, and firm performance in the US airline industry: the role of managerial discretion. Manag Decis 46(2):201–222. https://doi.org/10.1108/00251740810854122
Gonçalves T, Gaio C, Costa E (2020) Committed vs opportunistic corporate and social responsibility reporting. J Bus Res 115(June 2019):417–427. https://doi.org/10.1016/j.jbusres.2020.01.008
Gupta K, Krishnamurti C (2021) Corporate social responsibility, competition, and firm value. Pac Basin Financ J 68(July):101622. https://doi.org/10.1016/j.pacfin.2021.101622
Halder SC, Malikov E (2020) Smoothed LSDV estimation of functional-coefficient panel data models with two-way fixed effects. Econ Lett 192:109239. https://doi.org/10.1016/j.econlet.2020.109239
Hassan A, Ibrahim E (2012) Corporate environmental information disclosure: factors influencing companies’ success in attaining environmental awards. Corp Soc Responsib Environ Manag 19(1):32–46. https://doi.org/10.1002/csr.278
He F, Ma Y, Zhang X (2020a) How does economic policy uncertainty affect corporate Innovation?–evidence from China listed companies. Int Rev Econ Finance 67(September 2019):225–239. https://doi.org/10.1016/j.iref.2020.01.006
He Q, Wang Z, Wang G, Zuo J, Wu G, Liu B (2020b) To be green or not to be: how environmental regulations shape contractor greenwashing behaviors in construction projects. Sustain Cities Soc 63(July):102462. https://doi.org/10.1016/j.scs.2020.102462
Helfaya A, Moussa T (2017) Do board’s corporate social responsibility strategy and orientation influence environmental sustainability disclosure? UK evidence. Bus Strateg Environ 26(8):1061–1077. https://doi.org/10.1002/bse.1960
Hughes M, Cesinger B, Cheng CF, Schuessler F, Kraus S (2019) A configurational analysis of network and knowledge variables explaining Born Globals’ and late internationalizing SMEs’ international performance. Ind Mark Manag 80(November 2015):172–187. https://doi.org/10.1016/j.indmarman.2017.12.001
Isa CMM, Saman HM, Nasir SRM (2014) Specific-factors influencing market selection decision by Malaysian construction firms into international market. Procedia Soc Behav Sci 129(2002):4–10. https://doi.org/10.1016/j.sbspro.2014.03.641
Jain R, De Moya M (2013) Global, local, or glocal: investigating CSR strategies of best corporate citizens in India. Int J Strateg Commun 7(3):207–226. https://doi.org/10.1080/1553118X.2013.782548
Jarboui S (2021) Renewable energies and operational and environmental efficiencies of the US oil and gas companies: a true fixed effect model. Energy Rep 7:8667–8676. https://doi.org/10.1016/j.egyr.2021.04.032
Jiang Z, Wang Z, Zeng Y (2020) Can voluntary environmental regulation promote corporate technological innovation? Bus Strateg Environ 29(2):390–406. https://doi.org/10.1002/bse.2372
Karim KE, Lacina MJ, Rutledge RW (2006) The association between firm characteristics and the level of environmental disclosure in financial statement footnotes. Adv Environ Account Manag 3(06):77–109. https://doi.org/10.1016/S1479-3598(06)03003-2
Katmon N, Mohamad ZZ, Norwani NM, Farooque OA (2019) Comprehensive board diversity and quality of corporate social responsibility disclosure: evidence from an emerging market. J Bus Ethics 157(2):447–481. https://doi.org/10.1007/s10551-017-3672-6
Kirmani A, Rao AR (2000) No pain, no gain: a critical review of the literature on signaling unobservable product quality. J Mark 64(2):66–79. https://doi.org/10.1509/jmkg.64.2.66.18000
Koenker R, Hallock KF (2001) Quantile regression. J Econ Perspect 15(4):143–156. https://doi.org/10.1257/jep.15.4.143
Lee KH (2017) Does size matter? Evaluating corporate environmental disclosure in the australian mining and metal industry: a combined approach of quantity and quality measurement. Bus Strateg Environ 26(2):209–223. https://doi.org/10.1002/bse.1910
Lewis BW, Walls JL, Dowell GW (2014) Difference in degrees:CEO characteristics and firm environmental disclosure. Strateg Manag J 35(5):712–722. https://doi.org/10.1002/smj
Li L, Deng X (2021) Issues and strategies of corporate social responsibility in international engineering construction. J Civ Eng Manag 38(4):78–83
Li Q, Ruan W, Shi H, Xiang E, Zhang F (2022) Corporate environmental information disclosure and bank financing: moderating effect of formal and informal institutions. Bus Strat Environ July 2021, 1–16. https://doi.org/10.1002/bse.3055
Li Y, Zhang X, Yao T, Sake A, Liu X, Peng N (2021) The developing trends and driving factors of environmental information disclosure in China. J Environ Manage 288(February):112386. https://doi.org/10.1016/j.jenvman.2021.112386
Lin Y, Huang R, Yao X (2021) Air pollution and environmental information disclosure: an empirical study based on heavy polluting industries. J Clean Prod 278:124313. https://doi.org/10.1016/j.jclepro.2020.124313
Liu L, Wang Z, Li X, Liu Y, Zhang Z (2022) An evolutionary analysis of low-carbon technology investment strategies based on the manufacturer-supplier matching game under government regulations. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-021-18374-6
Liu T, Bi J, Xing X, Zhu Y, Wang J, Yu S (2021) Bridging production factors allocation and sustainable operations in China’s heavy-polluting firms: the moderation effect of internationalization. J Clean Prod 297(92):126637. https://doi.org/10.1016/j.jclepro.2021.126637
Liu X, Anbumozhi V (2009) Determinant factors of corporate environmental information disclosure: an empirical study of Chinese listed companies. J Clean Prod 17(6):593–600. https://doi.org/10.1016/j.jclepro.2008.10.001
Lu W (2014) Reliability of Engineering News-Record international construction data. Constr Manag Econ 32(10):968–982. https://doi.org/10.1080/01446193.2014.919403
Luo W, Guo X, Zhong S, Wang J (2019) Environmental information disclosure quality, media attention and debt financing costs: evidence from Chinese heavy polluting listed companies. J Clean Prod 231:268–277. https://doi.org/10.1016/j.jclepro.2019.05.237
Ma S, Dai J, Wen H (2019) The influence of trade openness on the level of human capital in China: on the basis of environmental regulation. J Clean Prod 225:340–349. https://doi.org/10.1016/j.jclepro.2019.03.238
Marthinsen T, Bashiri N, Lu L (2021) Does green innovation damage financial performance of oil and gas companies? Resour Policy 73(October 2020). https://doi.org/10.1016/j.resourpol.2021.102235
McCann BT, Reuer JJ, Lahiri N (2016) Agglomeration and the choice between acquisitions and alliances: an information economics perspective. Strateg Manag J 37(6):1085–1106. https://doi.org/10.1002/smj.2387
McConnell JJ, Servaes H (1990) Regenerative burner system for Chargenöfen in der Stahlindustrie. J Financ Econ 27(2):595–612
Meng XH, Zeng SX, Tam CM (2013) From voluntarism to regulation: a study on ownership, economic performance and corporate environmental information disclosure in China. J Bus Ethics 116(1):217–232. https://doi.org/10.1007/s10551-012-1462-8
Meng XH, Zeng SX, Xie XM, Qi GY (2016) The impact of product market competition on corporate environmental responsibility. Asia Pac J Manag 33(1):267–291. https://doi.org/10.1007/s10490-015-9450-z
Meng X, Zeng S, Xie X, Zou H (2019) Beyond symbolic and substantive: strategic disclosure of corporate environmental information in China. Bus Strateg Environ 28(2):403–417. https://doi.org/10.1002/bse.2257
Ministry of Environmental Protection of China (2007) Guideline for Environmental Information Disclosure (Trial). https://www.mee.gov.cn/gkml/zj/jl/200910/t20091022_171845.htm. Accessed 21 Mar 2022
Muller A (2006) Global versus local CSR strategies. Eur Manag J 24(2–3):189–198. https://doi.org/10.1016/j.emj.2006.03.008
Nguyen T, Locke S, Reddy K (2015) Ownership concentration and corporate performance from a dynamic perspective: does national governance quality matter? Int Rev Financ Anal 41:148–161. https://doi.org/10.1016/j.irfa.2015.06.005
Nguyen CP, Schinckus C, Su TD, Chong F (2018) Institutions, inward foreign direct investment, trade openness and credit level in emerging market economies. Rev Dev Financ 8(2):75–88. https://doi.org/10.1016/j.rdf.2018.11.005
Ren S, Wei W, Sun H, Xu Q, Hu Y, Chen X (2020) Can mandatory environmental information disclosure achieve a win-win for a firm’s environmental and economic performance? J Clean Prod 250:119530. https://doi.org/10.1016/j.jclepro.2019.119530
Ruigrok W, Wagner H (2003) Internationalization and performance: an organizationl learning perspective. MIR: Manag Int Rev 43(1):63–83. https://doi.org/10.2307/40835634
Sarvari H, Chan DWM, Alaeos AKF, Olawumi TO, Abdalridah Aldaud AA (2021) Critical success factors for managing construction small and medium-sized enterprises in developing countries of Middle East: evidence from Iranian construction enterprises. J Build Eng 43(July):103152. https://doi.org/10.1016/j.jobe.2021.103152
Sen M, Mukherjee K, Pattanayak JK (2011) Corporate environmental disclosure practices in India. J Appl Acc Res 12(2):139–156. https://doi.org/10.1108/09675421111160709
Shanghai Stock Exchange (2008) Guideline for environmental information disclosure of listed firms in shanghai stock exchange. https://www.sse.com.cn/lawandrules/sserules/listing/stock/c /c_20150912_3985851.shtml. Accessed 21 Mar 2022
Shleifer A, Vishny RW (1986) Large shareholders and corporate control. J Polit Econ 94(3):461–488. https://www.jstor.org/stable/1833044. Accessed 21 Mar 2022
Siegel AF, Wagner MR (2022) Multiple regression: predicting one variable from several others. In: Siegel AF, Wagner MR (eds) Practical Business Statistics, 8th edn. Academic Press, pp 371–431. https://doi.org/10.1016/B978-0-12-820025-4.00012-9
Simoni L, Bini L, Bellucci M (2020) Effects of social, environmental, and institutional factors on sustainability report assurance: evidence from European countries. Meditari Account Res 28(6):1059–1087. https://doi.org/10.1108/MEDAR-03-2019-0462
Smith G (2015) Essential statistics, regression, and econometrics. Academic Press, Cambridge, MA. https://doi.org/10.1016/C2014-0-04762-44
Spence M (1973) Job market signaling. Quart J Econ 87(3):355–374. https://doi.org/10.1016/B978-0-12-214850-7.50025-5
Su W, Peng MW, Tan W, Cheung YL (2016) The signaling effect of corporate social responsibility in emerging economies. J Bus Ethics 134(3):479–491. https://doi.org/10.1007/s10551-014-2404-4
Sullivan D (1994) Measuring the degree of internationalization of a firm. J Int Bus Stud 25(2):325–342. https://doi.org/10.1057/palgrave.jibs.8490203
Taj SA (2016) Application of signaling theory in management research: addressing major gaps in theory. Euro Manag J 34(4):338–348. https://doi.org/10.1016/j.emj.2016.02.0013
Tang C, Tang Y, Su S (2019) R&D internationalization, product diversification and international performance for emerging market enterprises: an empirical study on Chinese enterprises. Eur Manag J 37(4):529–539. https://doi.org/10.1016/j.emj.2018.11.003
Villalonga B, Trujillo MA, Guzmán A, Cáceres N (2019) What are boards for? Evidence from closely held firms in Colombia. Financ Manage 48(2):537–573. https://doi.org/10.1111/fima.12224
Waddock SA, Graves SB (1997) The corporate social performance–financial performance link. Strat Manag J 18(4):303–319. https://doi.org/10.1002/(SICI)1097-0266(199704)18:4<303::AID-SMJ869>3.0.CO;2-G
Wang G, He Q, Xia B, Meng X, Wu P (2018) Impact of institutional pressures on organizational citizenship behaviors for the environment: evidence from megaprojects. J Manag Eng 34(5):04018028. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000628
Wang G, Wu P, Wu X, Zhang H, Guo Q, Cai Y (2020a) Mapping global research on sustainability of megaproject management: a scientometric review. J Clean Prod 259:120831. https://doi.org/10.1016/j.jclepro.2020.120831
Wang G, Zhang H, Xia B, Wu G, Han Y (2020b) Relationship between internationalization and financial performance: evidence from ENR-listed Chinese firms. J Manag Eng 36(2):04019044. https://doi.org/10.1061/(asce)me.1943-5479.0000736
Wang S, Wang H, Wang J, Yang F (2020c) Does environmental information disclosure contribute to improve firm financial performance? An examination of the underlying mechanism. Sci Total Environ 714(96):136855. https://doi.org/10.1016/j.scitotenv.2020.1368552
Wang D, Li X, Tian S, He L, Xu Y, Wang X (2021a) Quantifying the dynamics between environmental information disclosure and firms’ financial performance using functional data analysis. Sust Prod Consump 28:192–205. https://doi.org/10.1016/j.spc.2021.03.026
Wang G, Li Y, Zuo J, Hu W, Nie Q, Lei H (2021b) Who drives green innovations? Characteristics and policy implications for green building collaborative innovation networks in China. Renew Sustain Energy Rev 143(March):110875. https://doi.org/10.1016/j.rser.2021.110875
Wang G, Zeng S, Xia B, Wu G, Xia D (2022) Influence of financial conditions on the environmental information disclosure of construction firms. J Manag Eng 38(1):04021078. https://doi.org/10.1061/(asce)me.1943-5479.0000982
Wu W, Liang Z, Zhang Q (2020) Effects of corporate environmental responsibility strength and concern on innovation performance: the moderating role of firm visibility. Corp Soc Responsib Environ Manag 27(3):1487–1497. https://doi.org/10.1002/csr.1902
Xia D, Wang XQ (2021) The synergetic impact of environmental and innovation information disclosure on corporate financial performance: an empirical study based on China coal listed companies. Technovation 100(July 2020):102179. https://doi.org/10.1016/j.technovation.2020.102179
Xiang L, Chen Z (2016) Corporate governance, social responsibility information disclosure, and enterprise value in China. J Clean Prod 142:1075–1084. https://doi.org/10.1016/j.jclepro.2016.09.102
Yang X, Wang Y, Hu D, Gao Y (2018) How industry peers improve your sustainable development? The role of listed firms in environmental strategies. Bus Strateg Environ 27(8):1313–1333. https://doi.org/10.1002/bse.2181
Yang Y, Yao C, Li Y (2020) The impact of the amount of environmental information disclosure on financial performance: the moderating effect of corporate internationalization. Corp Soc Responsib Environ Manag 27(6):2893–2907. https://doi.org/10.1002/csr.2010
Zaheer S (1995) Overcoming the liability of foreignness. Acad Manag J 38(2):341–363. https://doi.org/10.2307/256683
Zeng SX, Xu XD, Dong ZY, Tam VWY (2010) Towards corporate environmental information disclosure: an empirical study in China. J Clean Prod 18(12):1142–1148. https://doi.org/10.1016/j.jclepro.2010.04.005
Zeng SX, Xu XD, Yin HT, Tam CM (2012) Factors that drive Chinese listed companies in voluntary disclosure of environmental information. J Bus Ethics 109(3):309–321. https://doi.org/10.1007/s10551-011-1129-x
Zhang H, Xu T, Feng C (2022) Does public participation promote environmental efficiency? Evidence from a quasi-natural experiment of environmental information disclosure in China. Energy Economics 108(January):105871. https://doi.org/10.1016/j.eneco.2022.105871
Zhang Y, Wiersema M (2009) Stock market reaction to CEO certification: the signaling role of CEO background. Strateg Manag J 30(7):693–710. https://doi.org/10.1002/smj
Zhao Z-Y, Tang C, Zhang X, Skitmore M (2017) Agglomeration and competitive position of contractors in the international construction sector. J Constr Eng Manag 143(6):04017004. https://doi.org/10.1061/(asce)co.1943-7862.0001284
Zheng Y, Ge C, Li X, Duan X, Yu T (2020) Configurational analysis of environmental information disclosure: evidence from China’s key pollutant-discharge listed companies. J Environ Manage 270(June):110671. https://doi.org/10.1016/j.jenvman.2020.110671
Funding
This paper was supported by the National Natural Science Foundation of China (Project Numbers: 71901101, 71841021, 71620107004, and 72071133), the Fellowship of China Postdoctoral Science Foundation (Project Number: 2020M671134), and the Fundamental Research Funds for the Central Universities, China (Program Number: 2662021JC002).
Author information
Authors and Affiliations
Contributions
This idea was given by Ge Wang. Qi’ang Du analyzed the data and wrote the draft of the paper. Ge Wang, Xiaodong Li, Xiaopeng Deng, and Yanliang Niu revised and proofread the paper.
Corresponding author
Ethics declarations
Ethics approval and consent to participate
Not applicable.
Consent for publication
All authors listed agree to publish this work.
Competing interests
The authors declare no competing interests.
Additional information
Responsible Editor: Nicholas Apergis
Publisher's note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Supplementary Information
Below is the link to the electronic supplementary material.
Rights and permissions
Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Wang, G., Du, Q., Li, X. et al. From ambiguity to transparency: influence of environmental information disclosure on financial performance in the context of internationalization. Environ Sci Pollut Res 30, 10226–10244 (2023). https://doi.org/10.1007/s11356-022-22664-y
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-022-22664-y