Does environmental information disclosure affect the performance of energy-intensive firms' borrowing ability? Evidence from China

In recent years, a growing strand of China's listed companies chose to disclose environmental information, which may potentially affect their financial performance then further influence its performance of financial supports. To quantitatively investigate the impact of enterprise's environmental information disclosure on the ability of firms' borrowing in China, this paper divides the measurements of information disclosure into five categories and evaluates firms' performance in capital market through its availability of a loan and the cost of capital. In total, 97 listed energy-intensive companies in China are selected and their data covering the period of 2000-2014 are utilized for empirical study. The empirical results indicate that enterprise's environmental information disclosure appears to have a significantly positive effect on the loan size available, while the cost of capital is less sensitive to environmental information disclosure. The empirical evidence also suggests that, among the five aspects of information disclosure measurements, the future plan and monetary information are the most influential factors of the cost of capital.