How Does Mandatory Environmental Disclosure Affect the Earnings Management of Heavily Polluting Enterprises?
Based on the perspective of Political Cost and Finance Cost,this paper empirically tests the impact of mandatory envi-ronmental information disclosure on the earnings management of heavily polluting enterprises by using the exogenous event with the nature of"quasi-natural experiment"issued in 2010 to the"Guidelines for Environmental Information Disclosure of Listed Companies".It was found that after the guidelines were issued,heavily polluting enterprises carried out significantly downward earnings management activities,which was particularly evident in the sample of non-state-owned enterprises.In addition,the downward earnings management of heavy polluting enterprises is based on the consideration of political cost rather than financ-ing cost,that is,the downward earnings management of heavy polluting enterprises is mainly to win regulatory sympathy rather than capital sympathy.
Mandatory environmental information disclosureHeavy polluting enterprisesEarnings management
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