Environmental supervision distance, government-enterprise collusion and corporate environmental information disclosure

Abstract

Based on the framework of government-enterprise collusion and proactive government regulation, this study examines the impact of the Environmental Protection Agency (EPA) regulatory distance on corporate environmental information disclosure (EID) using data from listed companies in China from 2009 to 2021. The results of the study show that: (1) The closer the geographical distance between the local EPA and the company, the poorer the quality, which verifies the collusion effect. Our results are robust after a series of robustness checks. (2) The collusion effect of geographical distance primarily works by enhancing the ability of companies to seek environmental protection. (3) The impact is greater when the sample company belongs to non-sub-provincial municipal, pollution industry, state-owned, large-scale, and mature enterprises. (4) The central environmental inspections and media attention can alleviate the collusion effect of environmental regulatory distance. This study provides new empirical evidence for the " distance decay effect " in geo-economics and offers new insights from the perspective of geo-economics for measuring government-enterprise collusion.