The impact of carbon information disclosure on the cost of capital: The moderating role of regulatory pressures

Under the carbon peak target and carbon neutrality vision, carbon information disclosure becomes an important signal of corporate sustainability and has a significant impact on the capital costs of enterprises. Based on 588 listed companies in Shanghai and Shenzhen A-share heavy polluting industries from 2015 to 2019, we explored the lag effect of carbon information disclosure (CID) on the weighted average capital cost (WACC) of enterprises and analyzed the moderating effect of environmental supervision from two aspects: government regulatory pressure and market regulatory pressure. The results show that: (1) CID has a lag effect on WACC, and it shows a significant U-shaped relationship when CID lags two periods. (2) Government regulatory pressure and market regulatory pressure have a significant positive moderating effect on the relationship between CID and WACC. In addition, we conducted a series of heterogeneity analyses based on ownership structure and pollution monitoring, and calculated the turning points of the U-shaped relationship for different types of firms. This research provides relevant suggestions for the sustainable development of enterprises and the formulation of regulatory policies by the government.