Potential Consequences of Environmental Information Embellishment Behaviour
This paper examines the environmental information embellishment behaviour of Chinese listed companies.By constructing a China-specific environmental thesaurus covering 1597 keywords,this paper utilizes data from non-financial enterprises listed on the Shanghai and Shenzhen stock exchanges that have published social responsibility reports between 2008 and 2022 to capture environmental text information disclosed by enterprises within the cultural context of"one meaning,multiple words"by leveraging text analysis methods,and employs threshold and quantile models to examine the existence of environmental information embellishment behaviour.Furthermore,we employ a panel fixed effects model to investigate the impact of environmental information embellishment behaviour from a benefit-risk perspective.Research reveals that Chinese listed companies engage in environmental information embellishment behaviour,which leads to earnings losses and exacerbated long-term risks for the firms.The reason is that embellishment behaviour diminishes the quality of information disclosure and impairs market participants'preference for firms.Additionally,the tone of expression serves as a means of embellishment.The deterioration in the accounting information quality,the enhancement of investors'environmental information recognition capabilities,and the increased corporate visibility amplify the economic consequences of embellishment behaviour.This study offers a new perspective on the strategic behaviour of environmental information disclosure,thus offering insights to improve the green governance system.