The impact of the quality of environmental information disclosure on financial performance: the moderating effect of internal and external stakeholders

Increasing attention to serious environmental problems has caused the public to put forth more pressure on firms to fulfill their responsibilities to society at large. The establishment of a strict and mandatory environmental information disclosure (EID) mechanism has become particularly urgent. This study takes A-share listed firms in China's pharmaceutical manufacturing industry from 2011 to 2019 as a case. Considering the impact of the quality of EID on financial performance (FP), the moderating effects of internal and external factors, such as environmental regulation (ER), media pressure (MP), and executive compensation (EC), are analyzed. The results showed that the quality of EID had a negative effect on FP. It is difficult for EC to have a moderating effect on the relationship between the two. ER and MP, which are intended to exert strong external means of governance, cannot have a positive impact. Differences in regional marketization and ownership affect the moderators. This study highlights the difficulty of improving the environmental behavior of firms even while under the direct pressure from internal and external stakeholders and provides a reference for regulatory authorities to improve the EID mechanism.