This paper attempts to provide a more systematic view of the relationship between environmental

information disclosure and environmental public goods to reconcile the existing conceptual
controversy and empirical inconclusiveness. These findings can serve as an important reference
provide important references for developing economies to improve their environmental management
systems and achieve green transformation.

Introduction

As early as the beginning of the 21st century, China’s infrastructure construction surpassed that of
other developing countries and even developed countries. Evidence shows that environmental
quality improves when the proportion of environmental protection investment in GDP reaches 3–
5% . Bureau of Statistics, China’s environmental protection investment accounted for only 1.84% of
GDP in 2010, and it was below 3% for the following ten consecutive years, dropping to 1.16% in
2017. Therefore, China is still facing pressure to improve the quality of the environment due to
economic growth, and the structure of public goods expenditures needs to be optimized.

This article attempts to reveal whether China’s EID helps attract the governmental attention to EPG.

First, most of the previous studies have focused on the analyzing of the impact of fiscal
decentralization on EPG , while few have examined the impact of EID on EPG.

Second, others scholars have focued on the analyzing of the supply incentive of public goods and
they have tended to conflate all types of public goods . In fact, however, the incentive mechanisms
of economic public goods and noneconomic public goods cannot be lumped together.

Our study builds on previous research in several important ways.

Instead of focusing exclusively on the impact of corporate environ

The scope of our analysis allows us to supplement previous studies. Previous research on EID can
be divided into several aspects. The third has to do with the driving force of EID, such as the stock
market , pressure from environmental protection organizations , and consumers’ environmental
awareness . EID on other factors, such as pollution emissions , corporate environmental
performance and bank behavior strategies .

Not only is FDI one of the forces promoting closer economic inter

To a large extent, it supplements the in ternal governance system. Although foreign parent

companies have difficulties directly in the decision-making of the management layer of
subsidiaries , they can monitor and evaluate the decisions of subsidiaries through an external
information system. Such a system enables parent companies to achieve the goal of indirectly
participating in the decision-making process of their subsidiaries. The information disclosure of
information about the environmental protec tion strategies adopted in developed economies that are
transitioning from government resource allocation to market-oriented allocation makes these
countries more attractive to FDI than developing countries.

However, in China, this mechanism may be different. Chinese listed companies tend to disclose

descriptive information, such as strategic environmental planning, which is difficult to verify, rather
than reducing consumption and pollution . Whenever the central government issues the objectives
and tasks of environmental pollution control in the coming year or the next strategic period, local
governments publish more stringent requirements. In fact, however, local governments tend to
disclose positive cases of successful environ.

These funds could be better allocated to public services and anti-poverty programs. Corruption has
negative social im pacts, threatening democracy and the rule of law, undermining market
coordination, and intensifying people’s distrust of government officials and structures. The premise
of this logic is the accuracy of government information disclosure. If corruption exists in the early
stage of EID, the information disclosed by the government will not provide a reference for the public
to supervise corruption.

Chinese public often think that the environmental information that it receives is
lagging, incomplete, and even false , which may lead to a lack of trust in the government.

Specifically, government and business enterprises have a strong moti

In addition, enterprises with corrupt government-business relationships selectively disclose

information, and senior government officials actively distribute enterprise information to analysts who
can meet the needs of the enterprises .

This subjective choice aggravates the information asymmetry of enter

Mation, the existence of corruption reduces the decline in the quality of information that is disclosed .

Penditures on public services through sufficient investment in environmental protection.

From the perspective of local governments, actively publishing environmental information sends

high-cost investment signals to the foreign capital market. Therefore, it is not uncommon for local
governments to reduce their environmental standards to attract investment. Cally underdeveloped
areas, officials are more inclined to use lower environmental regulation to attract investment, as strict
regulations can reduce the willingness of foreign investors to invest their capital. Driven by the
background of large-scale investment promotion and the strategic goal of pursuing GDP growth, in
addition to giving large-scale tax relief and policy support to foreign-funded enterprises , improving
the allocation of infrastructure is a way to improve the regional investment environment.

If the policy restricts the current development orientation of a region, then the local government has
the motivation to undertake evasive, concealing and corrupt activities to disclose false or incomplete
information.

Mental protection are mostly used in research at the provincial level, city-level data are scarce.

This paper uses the environmental disclosure data of 2692 listed companies from 2008 to 2018.

Wj =

This paper designs an indicator system for calculating enterprise EID, as shown in Table 2. The
environmental in formation disclosed by a company is divided into five
dimensions, i. Sure, environmental supervision and certification disclosure, the EID carrier, and
environmental performance and governance disclosure, with a total of 30 third-level indicators. The
higher the branch is, the greater the degree of disclosure.
Then, the paper sum.

Although Eastern China is not highly dependent on foreign capital utilization, the absolute level of
foreign capital utilization in it is higher than that in the Central and Western China as a whole, and
the investment in EPG in Eastern China is not necessarily weaker than that in Central and Western
China.

China, covering the disclosure of the public recognition of the Chinese government’s control of
corruption. Ficials as the proxy variable of corruption in a region. The larger the value is, the higher
the degree of corruption.

According to the discussion of hypothesis one in this paper, a tradi

Istics of path dependence, the local government takes the level of public. To control the influence of
other factors on the EPG supply, this paper also controls the variables at the level of other cities.

This model is used to test not only the influence of the dependent var

w represents the spatial weight matrix, and the value of each element in the matrix is the reciprocal
of the difference between two cities’ GDP plus 1.

The data sources of this paper include the following.

In 2008, the first PITI report was published, and it included the comprehensive scores of 113 cities
above the prefecture level. The standard of the report has been adjusted since 2013, and the total
number of research samples has expanded from 113 cities to 120 cities.

The Internet media attention data come from the Baidu News search engine . The government
attention data come from the govern ment work reports of 31 provinces and autonomous regions in
China from 2008 to 2018. Table 4 presents the descriptive statistics of the data. The initiative of
enterprises to publicize environmental information to the public and society indicates environmental
responsibility behavior.

Tively stimulating the supply of local EPG. Second, in regression and regression , the regression
coefficient of w. Eid is positive, and all coefficients are significant at the 1% level. Objective media
attention is the total amount of negative media attention of other cities regarding the listed
companies in a city.

This paper is not the first to link media attention and EID . However, previous studies have mostly
considered the total amount of media attention, ignoring that local media reports on listed companies
in their own cities may be subjective or protective and even offer excessive praise or conceal
facts. In com parison, reports from other city media tend to be more objective, and the possibility of
deliberately beautifying or concealing is low. In addition, negative reports in other regions have a
stronger supervisory effect on local listed companies.

This negative news encourages local govern ments to disclose environmental information more
actively, while in general, the supply of local EPG is not strongly affected by the reports of external
media. Mately 2,350,000 news reports. Based on this procedure, when the city where the reporting
media are located is the same as the city where the listed company is located, the data are
eliminated. Finally, this article obtains the total number of news reports from other cities on the city’s
listed companies to measure objective media attention.

In theory, the greater the attention other cities give to listed company j of city i, the stronger the
invisible external governance function of the media will be.

In the second stage, the eid coefficient is positive and significant at the 10% level. Therefore, the
results after the second instrumental variable test still support the conclusion. Both results show that
the conclusion of the benchmark regression remains valid. Robustness test.

To test the robustness of the above conclusions and to eliminate the possible deviation caused by
the use of a single measurement method, this paper adopts two methods as robustness
tests. First, it replaces the core explanatory variables. This index can better measure the level of
government disclosure of environmental information. Since the data cover only 113 cities in the early
stage of publication and extend to 120 cities only in the late stage, there are many missing data
observations.

Mation is used as the government’s attention to environmental issues.

Replace explained variables negative at the significance level of 1% when no problems are
consid

When several problems are considered at the same time, the regression coefficient is negative and
significant at the 1% level. Cient is positive, indicating that EID has a crowding-out effect on local
foreign capital inflow, making foreign capital flow more to cities with low EID.

In contrast, the government’s budget savings due to reduced foreign capital can be used more for
EPG expenditures. Compared with the enterprise-level EID for measuring the overall EID of a
region, the government-level EID has a slightly smaller role in promoting the supply of EPG but still
supports the hypothesis. To test the intermediary role of the foreign capital utilization level in this
link, this paper uses the three-step method of the intermediary effect. Table 9 reports the impact of
the core explanatory variables on the supply of EPG without adding the intermediary variables.

In regression , consid.

Panel A

To test hypothesis three, that is, whether the degree of corruption acts as a moderator of EID to
promote the EPG supply, this paper uses the moderating effect model to explore this argument, as
shown in Table 11. Because the degree of EID and the degree of corruption are continuous
variables, this paper makes a centralized treatment of the two, where c_eid and c_cor represent the
variables after centralization. Sults show that the regression coefficient of eid is always positive in
the column for regressions -. The main reason is that the authenticity of EID is difficult to guarantee
in areas where corruption is more serious.

Local enterprises may disclose incomplete or false envi ronmental information, resulting in a

deviation between the true disclosure degree and the calculated disclosure degree and thereby
reducing the promotion of EPG. In contrast, when coercive isomorphism and imitative isomorphism
occur, firms and governments in regions with high levels of corruption use evasion, concealment and
rent-seeking to disclose false information to meet stakeholders’ needs, resulting in inefficient infor
mation disclosure and insufficient incentives for EPG by EID.

Discussion

They find that developing economies are often considered pollution havens by devel oped
countries, and foreign companies locate their subsidiaries in developing economies largely on
account of the countries’ low level of environmental regulation. An increase in environmental costs
imperceptibly hinders the entry of foreign capital and can even lead to the withdrawal of foreign
capital. Over the years, the competition among regions to attract investment projects has indeed led
to the rapid development of developing economies, but the excessive use of incentives by local
governments to attract foreign investment has resulted in a serious lack of social public
services. The EID system uses the means of market adjustment to crowd out foreign capital so that
the government has a more adequate budget for social public good input.

Some conclusions of this article are consistent with those of previous

In addition, the possibility of evasion and fraud at the government level increases. China’s economic
growth. However, it has also gradually become an obstacle to China’s sustainable economic
development. The starting point of this study is the objective to correct the distortion of developing
economies’ expenditures on public goods, which holds great policy relevance for solving the
dilemma of EPG supply shortages and realizing the long-term goal of establishing and perfecting an
environmental governance system by 2025.

On the basis of a literature review, EID, the level of foreign capital utilization, the degree of

corruption and the supply of EPG are included in a single framework in this paper. Based on data on
202 cities and listed companies from 2008 to 2018, the influence of the degree of EID on the supply
of EPG is tested by a dynamic spatial panel Durbin model, and the following conclusions are drawn.

EPG supply of local governments has specified path dependence, while

Second, EID promotes the supply of EPG by restraining the level of foreign capital utilization in the
area. Third, the degree of regional corruption restrains the promoting effect of EID on EPG.

Acknowledgements

Supplementary data to this article can be found online at https://doi. Eiar.