Environmental Information Disclosure and Financial Performance of Chinese Manufacturing Firms: Evidence from 2020–2024

Abstract

This study examines the relationship between environmental information disclosure (EID) and financial performance among 2,229 listed Chinese manufacturing firms from 2020–2024. Drawing on stakeholder, resource-based, and institutional theories, the analysis explores how firm characteristics—asset size, workforce, and ownership—affect disclosure behavior and financial outcomes. Using descriptive statistics, ANOVA, Pearson correlation, and panel regression, results reveal that while overall disclosure levels remain low (38.9%), larger and government-linked enterprises consistently outperform small and medium-sized firms. EID shows a significant positive association with market capitalization (β = 0.18, p < 0.01), but weaker relationships with short-term profitability (ROA, ROE). Findings suggest that environmental transparency enhances long-term market valuation rather than immediate accounting returns. Policy implications highlight the need for tiered ESG reporting frameworks, capacity-building programs for SMEs, and stronger regulatory incentives to align environmental governance with China’s “Dual Carbon” goals.